ISLAMABAD: The Ministry of Information Technology (IT) is diligently working on an incentives package for the sector in collaboration with relevant government stakeholders, that will increase the IT exports of the country to $10 billion by 2020 and accelerate the digitization of key economic sectors locally.
The package would be announced for further growth of flourishing IT industry and to take the sector to next level, a press release said on Sunday.
In this regard, the Minister of State for IT & Telecom Anusha Rehman Khan along with Secretary IT and other senior officials of the ministry, has met the Prime Minister twice in last few weeks to discuss the incentives package.
The incentives package includes various measures and is being designed after a thorough analysis of other important IT destinations of the region like Philippines, China, Bangladesh and India.
The package will overcome the challenges faced by the IT/ITeS industry in comparison to the competing & regional economies. Incentive package tackles issues like high taxation on IT/ITeS companies, lack of quality physical infrastructure and limited domestic opportunities.
The package as part of the Digital Pakistan Policy include fiscal proposals such as extension of zero rated income tax regime on IT exports to 2030 (currently set to expire in 2019), removal of 2-8% minimum tax on services as well as removal of custom duty and sales tax for imports on specific items.
5% cash reward is also being proposed to encourage the inward flow of IT export remittances in proper codes.
Other fiscal measures include Special Economic Zones (SEZs) for IT/ITeS sector to encourage the investment in IT ready physical infrastructure in the country, an issue currently hampering the growth in the sector.
In addition to tech SEZs, a land allocation model for public-private partnerships is also being devised. Fiscal incentives will be proposed to FBR for inclusion in the Finance bill 2018-19.