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ISLAMABAD: Pakistan’s IT and IT-enabled Services (ITeS) export remittances declined by around five percent on a month-on-month (MoM) basis during the first month (July) of the current fiscal year and stood at $214 million compared to $224 million in June 2023.

According to the official data, on a year-on-year (YoY) basis, the sector’s exports remittances increased by around seven percent when compared to $199 million in June 2022.

The State Bank of Pakistan (SBP) has downward revised the sector exports remittances to $2.593 billion for fiscal year 2022-23 against the initial estimates of $2.605 billion.

The ITeS export remittances missed the target of $3 billion set for the fiscal year 2022-23 by around 14 per cent, attributable to the non-implementation of agreed incentives, lack of consistency in policies, as well as, non-resolving the tax and banks-related issues.

Official data revealed that the sector exports remittances declined by around one percent during the fiscal year 2022-23 and stood at $2.593 billion compared to $2.619 billion during the fiscal year 2021-22.

The IT and the ITeS export remittances, including telecommunication, computer, and information services, reached an all-time high of $2.619 billion, a growth rate of 47.43 percent in the fiscal year 2022 compared to $2.108 billion in the fiscal year 2021.

The Ministry of Information Technology and Telecommunication had envisaged that the IT exports target of $5 billion would be achieved by June 2023.

However, it had also warned the government that on account of the non-implementation of agreed incentives, lack of consistency in policies, as well as, without resolving the tax and banks-related issues, the telecom sector exports remittances may suffer besides compromising its digital vision.

The National Assembly Standing Committee on Information Technology and Telecommunication was informed recently that Pakistan’s IT exports are over $5 billion but exports of just $2.5 billion are documented.

The stagnation in IT exports and a possible contraction on the cards have created profound concerns and apprehensions in the IT industry as the IT and the ITeS industry’s export remittances shrunk, sector experts stated.

They pointed out that the FBR, the SBP, the SECP, the TDAP, and the PSEB should work in tandem to align foreign exchange, taxation, companies’ regulations, and export and investment policies with international best practices.

Pakistani IT exports can easily be jacked up to the psychological mark of $5 billion in a quick succession of two years - provided policies of the government institutions turn business-friendly and focus on ease of doing business (EODB) parameters - on which Pakistan ranks abysmally low at 108th number, they added.

Copyright Business Recorder, 2023

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