ISLAMABAD: The Prime Minister’s Committee on IT Export Remittances, in a meeting on Friday, observed that while Pakistan’s IT exports are steadily increasing, a significant portion of earnings remains unremitted as many IT companies fail to repatriate the full amount of their foreign income.
The meeting, chaired by Minister for Finance and Revenue Senator Muhammad Aurangzeb, emphasized the need to ease capital movement to enhance IT export remittances. It was highlighted that increasing the flow of IT export earnings is vital for the growth of Pakistan’s economy and its burgeoning digital sector.
The Finance Minister stated that the IT sector has immense potential to become a cornerstone for foreign exchange generation. He stressed the need for a collaborative approach, consistent policies, and targeted reforms to fully unlock this potential and ensure the repatriation of foreign earnings.
Discussions underscored the importance of streamlining procedures, offering consistent tax exemptions for freelancers, and addressing issues related to the classification of remote workers and challenges faced by small IT firms. These measures aim to create a more favorable environment for IT businesses to remit their earnings back to Pakistan.
The committee noted that Pakistan is home to 2.32 million freelancers, contributing around 15% to IT exports. However, only 38,000 freelancers currently maintain bank accounts in the country. Officials from the State Bank of Pakistan (SBP) reported that approximately 500 new bank accounts are being opened weekly, a trend expected to encourage more freelancers to formalize their banking activities.
Governor SBP briefed the committee on initiatives to tackle these challenges, including simplified account opening procedures, awareness campaigns, enhanced complaint resolution mechanisms, and prioritizing the IT sector within banking frameworks.
Participants also discussed leveraging the Roshan Digital Account to facilitate international remittances for IT companies and freelancers.
To ensure data-driven policymaking, the committee decided to establish a working group comprising representatives from the Federal Board of Revenue (FBR), SBP, IT Ministry, and stakeholders from the IT industry, including P@SHA and the Freelancers Association. The group will focus on harmonizing data, addressing key issues, simplifying processes, enhancing transparency, and ensuring continuity of reforms initiated by SBP and other stakeholders.
The meeting was attended by Minister of State for IT & Telecom Shaza Fatima Khawaja, Advisor to the Finance Minister Khurram Shehzad, Chairman FBR, Governor SBP, CEO Pakistan Software Export Board (PSEB), Secretary and Special Secretary IT & Telecom, and other officials.
Speaking to Dawn, P@SHA Chairman Sajjad Syed termed allegations against the IT industry as unwarranted, noting that IT companies have international vendors.
“The real issue lies in the difficulty of making payments abroad from Pakistan, which is why IT exporters often park some funds outside the country,” he explained.
