Everyone speaks of the potential of Pakistan’s IT industry to contribute to GDP growth. The government seems to acknowledge this opportunity. So, it has announced tax breaks for the IT sector to promote investment.
These measures include lowering tax rates on investments, providing tax incentives to freelancers, and standardizing the tax exemption on equipment.
In recent years, the IT sector has experienced remarkable expansion. IT exports surged from $1.4 billion in the fiscal year 2019-20 to an all-time high of $2.1 billion the following year.
However, the growth rate moderated in FY 2021-22, with exports reaching $2.7 billion, as the Pakistan Software Houses Association for IT reported. The government had initially aimed for a target of $3 billion in exports for FY22.
What’s in the Budget for the IT Sector & Freelancers
The federal government has made several strategic decisions to foster investment in the IT sector. Firstly, it has announced tax breaks for the IT sector t promote investments.
This move aims to make it more financially appealing for individuals and businesses to invest their resources in IT ventures.
The government has also introduced tax breaks to support freelancers operating within the IT sector. By providing these incentives, freelancers are encouraged to take advantage of the opportunities available and contribute to the growth of the industry.
In addition, the government has taken steps to normalize duty-free equipment for the IT sector. This measure aims to facilitate the acquisition of necessary tools and technology by removing the burden of import duties.
The government hopes to attract more investment and promote the development of a thriving IT ecosystem. The government has taken measures to improve the ease of doing business for IT companies in the country.
This is expected to spur employment generation and foreign direct investment.