According to reports, American Business Council (ABC) of Pakistan has asked Federal Board of Revenue (FBR) to stable tax holiday on IT exports and IT-enabled services. Incase of withdrawal of tax exemption will prevent the global based IT companies of Pakistan to bring their money to country.
As per the budget proposals of the ABC for 2021-22, the suggested removal of the tax holiday on exports of IT and IT-enabled services in the finance bill shows the inconsistency of Government policies. Also it will be difficult for the big organizations to make any long term investments if they believe that GoP is not going to be consistent in its policies for the technology sector.
Currently, the Tax holiday seems a key and only incentive available to the IT and IT-enabled exports industry. It allows the industry to compete with other countries that operate in the same space like. Philippines, Poland, India, Egypt etc. By the removal of this exemption there could be an increase in cost and will have a direct impact on revenue generation capabilities as well as new business.
