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February 24, 2020

New Tech Companies, Startups in Pakistan to Enjoy 3-year Income Tax Exemption

Pakistan’s government has announced various incentives for the Information Technology sector in its budget for new fiscal year that will start from July 1. It is a good opportunity for the overseas Pakistanis who want to make investment in the IT sector in Pakistan.

New Tech companies and startups will be exempted from Income Tax for three years, a move the government expects will attract investment in the IT sector. Pakistan’s IT and telecommunication sector has witnessed a boom since the introduction of 3G and 4G technology a few years ago.

The government has also set a high-level committee called the Executive Council Forum (ECF) with an aim to boost Pakistan’s IT and ITES exports. At a recent meeting in Islamabad, attended by representatives of IT companies and multi-national corporations, various proposals were discussed to boost IT exports.

Besides the recent income tax exemption, announced in the budget, there is a zero income tax on IT exports till June 2019.

 

The government is setting up state of the art IT part in Islamabad with the help of Korean Exim Bank to provide an enabling environment to the IT companies.

Pakistan’s official statistics on software exports is around $500 to $600 million, but IT experts believe that the actual exports are more than $2 billion. Most of the software houses keep their money outside Pakistan due to heavy taxation. Pakistan Software Exports Board is aiming to help the industry earn $10 billion from software exports by 2025.

IT industry in Pakistan is one of the fastest growing industries.

 

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