Govt sets up Rs 10b funds for cash reward to IT firms

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ISLAMABAD: The government has decided to create Rs 10 billion funds to provide the cash reward to IT companies, outperforming experts in Pakistan. Meanwhile, the government has also decided to award a 5% percent rebate on IT exports to IT firms in Pakistan.

Meanwhile, the IT companies have lodged a complaint against the tax collecting body over harassing them.

The finance minister Shaukat Tarin, Tuesday approved the establishment of an Rs10 bn fund to provide Cash Rewards to IT companies against their experts in Pakistan.

In a meeting with the association of software houses here Tuesday the finance minister acknowledged that the IT exports needed to be enhanced and the government will provide all possible facilities to the sector.

While welcoming the decision of the finance minister the Pakistan Software Houses Association (P@SHA) has also expressed concerns over the attitude of the FBR accusing the tax collecting body of harassing the exporters and creating hurdles in the growth of the IT sector in the country.

The delegation of P@SHA and the Pakistan Software Export Board (PSEB) held a meeting with the finance minister and apprised him of issues faced by the software houses and IT exports.

The Barkan Saeed chairman P@SHA and Osman Nasir, managing director PSEB led the delegation.

During the meeting, finance and other ministers agreed to provide a rebate at the rate of five percent of their exports. IT sector will allocate 1 percent of annual remittances to PSEB every year to carry out skills development, capacity enhancement of IT companies, branding, marketing establishment of software technology parks across Pakistan.

The government has also allowed foreign companies to repatriate their profits.

Mr Nasir said that the decision will eventually help increase remittances from the IT services up to $3.5 bn in the ongoing fiscal year against $2.1 bn in 2020-21 only because the multinational companies do not bring all the earnings back to the country.

“There are many expenditures and payments for the companies around the world but due to restrictions they do not remit all amount into Pakistan, he said. The government has decided to allow the foreign companies to repatriate their profits to any foreign country,” he added.

The finance minister has also agreed to allow the freelancers to open a special dollar account to receive payments for their individual IT exports.

“The industry needs up to 50,000 IT experts annually but we will never grow if the freelancers cannot operate in an open environment,” said Barkan Saeed chairman P@SHA.

“The growth of freelancers will help generate employment opportunities even in remote areas of the country. We can harness this potential only if the government allows receiving payments of their work to a client outside Pakistan,” he added.

Regarding, their complaint against FBR, the finance minister agreed to form a high-level dispute resolution committee for quick resolution of tax-related disputes of the IT industry.