FPCCI slams withdrawal of tax exemption to IT industry

Web DeskWeb Editor

18th Jun, 2021. 06:56 pm
FPCCI

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has expressed concern over the withdrawal of tax exemption to the information technology (IT) sector, a statement said on Friday.

FPCCI President Mian Nasser Hyatt Maggo criticised the inclusion of the IT sector in the tax regime in the Federal Budget 2021/22, whereas it was exempted till 2025. This is the only industry in Pakistan that has posted over 70 per cent growth in exports during the last two years, and if the current pace of growth continues, it has the potential to earn up to $10 billion/annum in next three to four years, he said, adding that the government should keep it tax-free till 2025, as promulgated earlier.

Maggo lauded Federal Minister for IT and Telecom Syed Amin Ul Haque, who visited the FPCCI, for increasing the IT exports and fast spreading 4G connectivity in the country. He said the government issues bonds in the international markets to meet its budgetary requirements at more than 7 per cent and ignores its foreign exchange earning entrepreneurs.

If the government announces a mere 5 per cent rebate to IT exporters, they can easily bring $10 billion/annum in the country, he said, adding that Bangladesh provides a 10 per cent rebate in this regard.

The IT minister said all major development projects under the IT and Telecom Ministry are being carried out across Pakistan without any bias and in a time-bound fashion. Four weeks ago, a cabinet meeting was held in a paperless environment.

Now, the ministry is aiming at conducting parliamentary sessions in a paperless environment.

Syed Junaid Imam, Member IT, said that the IT industry has the potential of exponential growth if equity capital can be made available through venture capitalists. He requested the FPCCI members to invest in IT-related startups.

Muhammad Sohail Rajput, federal secretary for IT and Telecom Ministry, said that the ministry is opening IT parks and special zones to set up IT businesses and that will not be confined to large cities; but smaller cities will also be incorporated.

Osman Nasir, managing director of the Pakistan Software Export Board (PSEB), said that the Federal Board of Revenue (FBR) and the IT industry are not on the same page and there may be issues and bottlenecks if the FBR does not accommodate peculiar needs of the country.

Zohaib Khan, convener of the FPCCI’s Standing Committee on IT, expressed hopes with the inclusion of Pakistan into the Amazon’s seller list but warned that the SMEs need to be given adequate training on their systems and quality standards to make full and sustainable use of the opportunity.

Muhammad Azam Mughal, convener of the FPCCI’s Standing Committee on Cyber Crimes, highlighted the ever-increasing phenomenon of online harassment of women. The FIA must enhance its capacity to counter the menace, he added.

Maggo also stressed the need to set up a cyber-security wing to create awareness and help the business community remain secure in an online environment.

He expressed shock over taxes and duties on spare parts of laptops being made in Pakistan, whereas fully-assembled laptops are duty-free in Pakistan. This is a huge disparity and this will continue to keep Pakistan reliant on imported laptops forever.

He demanded that the IT-related hardware such as laptops, smartphones, biometric machines, ATM machines, POS machines, etc, should be made in Pakistan and their parts must be free from all taxes and duties.

Later, the FPCCI officials thanked the federal IT minister for his visit and briefing on various ongoing large-scale developmental projects in IT and Telecom industries. The FPCCI also appreciates the decision to declare telecom as an industry in the federal budget.

Adsence 300X250