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January 15, 2021

Pakistan Mulls Tax Incentives on IT Exports in Next Fiscal Year

Pakistan Software Export Board – a government-owned entity – has been tasked to prepare tax exemptions proposals on IT exports in the next fiscal year, as the country aims to tap the rising talent of young IT entrepreneur to make inroads in the global software market.

Tax incentives will also encourage IT companies to remit more of their earnings to Pakistan instead of relocating to another country.

A meeting of the Board of Directors of PSEB held in Islamabad on Feb. 16 to discuss steps to promote IT expansion and encourage new start-ups.

The Telecommunication Ministry is also working on setting up an IT Park in the capital Islamabad. Korean consultants have submitted an interim feasibility report on the project and will provide their final report next month. The government plans to have the ground-breaking ceremony in summer this year.

Five Pakistani companies will take part in upcoming Mobile World Congress being held in Barcelona to showcase their expertise in mobile applications and other IT services.

An incentive package for the IT industry is instrumental in promoting business in Pakistan and has attracted many foreign companies. Incentives for foreign companies include 100 percent ownership of equity, income tax exemptions till 2016, repatriation of 100 percent profit, seven-year tax holiday for venture capital funds and minimum rate of 30 depreciation on computer equipment.

The country’s central bank has allowed banks to open Internet Merchant Accounts.

Pakistan also has instant, reliable and high-speed connectivity with over 85 percent of telecommunication infrastructure is on fiber-optic cables.

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