According to the State Bank of Pakistan (SBP) data, IT sector exports during July-March FY22 surged to $1.948 billion at a growth rate of 29.26% in comparison to $1.5 billion in the same period of last year.
During the first 10 months of FY22, the IT sector made exports of $2.2 billion, contributing 38% to the overall services’ export and marking a 29% year-on-year jump, Arif Habib Limited (AHL) Head of Research Tahir Abbas told The Express Tribune.
The government had been focused on increasing IT exports whereas the idea of establishing an IT park with significant tax benefits was also being explored, he added.
Trade surplus for industry
According to the Economic Survey, Pakistan’s IT Industry is the largest net services exporter with exports to 169 countries as compared to the rest of the services sector.
The government’s incentives for the IT sector include a 100% tax credit on export income from IT and IT-enabled services until June 30, 2025, along with 100% tax credit on profits and gains derived by the IT start-ups for the tax year in which a start-up is certified by Pakistan Software Export Board and for the next two years.
The government has allocated Rs4 billion to PSEB for the financial incentive on IT and ITeS export remittances to be disbursed on the basis of export remittance receipts in FY2021.
Establishment of IT Park
A loan agreement was signed between the Economic Affairs Division and EXIM Bank of Korea worth $158 million for the establishment of Pakistan’s largest IT Park in Karachi. The total cost of the project is estimated at $186 million and would take 48 months to complete.
The government has focused on infrastructure development through the establishment of Software Technology Parks (STPs) STPs have been a major factor in facilitating IT and ITeS companies. There is a strong demand for STPs in the country due to the booming IT industry.