In the budget speech on 3rd June, Federal government announced extension in tax exemption on export of IT services and products till June 2019 as well as sales tax exemption on computers.
Ministry of IT and Pakistan Software Export Board (PSEB) had conducted a meet up with the IT industry in April 2016 to get feedback from the industry. After the meet up, PSEB and Ministry of IT compiled a proposal for extending tax exemption on exports of IT products and services which was submitted to the ministry of finance and FBR. In addition to tax exemption on exports, Ministry of IT had also proposed exemption of sales tax on computers including laptops and desktops to promote the growth of IT usage in the country. Both Ministry of IT and PSEB had lobbied with Ministry of Finance that IT industry is in an infancy stage when compared with some other countries in the region and that exports should be exempted to grow IT industry and its exports.
Minister of State for Information Technology, Ms. Anusha Rehman Khan, congratulated the IT industry and termed tax exemption and tax rebate on computers a good omen and a catalyst for further growth of Pakistan’s IT industry. After the continuous and strenuous efforts of Ministry of IT and PSEB, the government agreed to grant tax holiday on IT exports for 3 more years till 2019. The sales tax rebate will reduce the cost of laptops and computers by 17% which is a substantial saving for computer buyers.
MD PSEB, Asim Shahryar Husain, hoped that the industry would reciprocate to these tax rebates from the government by remitting more of their foreign income to Pakistan. Pakistan has tremendous IT talent and potential. However, this potential should be reflected through growth in remittances and exports also.
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