[vc_row][vc_column][vc_column_text dp_text_size=”size-4″]Yasser Bashir, Co-founder and CEO of Arbisoft, suggests that the federal government should implement a flat tax rate on both domestic and foreign IT incomes.
In a series of tweets, he advocates for facilitating easy access to funds, hardware, and overseas travel for companies and individuals who pay this tax.
According to Bashir, Pakistan can stimulate the growth of its IT-enabled services sector by moving away from tax holidays and instead providing transparent incentives that are practical and conducive to the sector’s expansion.
As a software company operator, I have been a part of endless & futile discussions on how the government in Pakistan can expand its IT enabled services sector. A 🧵.
— Yasser Bashir (@yasserbashir) July 5, 2023
According to Yasser Bashir, the CEO of Arbisoft, the federal government should facilitate three types of movements to incentivize formalization for tax-paying companies in the IT sector.
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Movement of Funds: IT companies should be allowed to move a significant portion of their export proceeds out of the country without unnecessary bureaucracy. This would enable acquisitions of foreign companies, which is currently challenging due to funds being parked in Pakistan. Allowing companies to take out what they bring in would encourage growth and investment.
Movement of People: Formal IT firms should receive support in establishing foreign offices and benefit from faster visa processing at foreign embassies. Easier travel for employees and foreign visitors would discourage brain drain and contribute to the progress of local IT firms. Simplifying the process of bringing foreign visitors to Pakistan would positively impact the perception of the country.
Movement of Hardware: There should be a distinction between formal and informal IT firms when it comes to importing hardware. Currently, the process is cumbersome and expensive for both types of firms. Offering an import facility as an incentive for formalization and paying the flat tax would streamline the process and encourage companies to operate within the formal sector.
Additionally, Yasser Bashir highlighted the need to make infrastructure, particularly internet services and office space, more affordable. He emphasized the importance of incentivizing the private sector to invest in skills-based talent development, as vocational training can provide faster employability for many students. Yasser also suggested raising the bar for university admissions and graduation to differentiate between engineers and technicians, as the current lack of distinction and low standards produce subpar graduates.
In summary, Yasser Bashir proposes creating incentives for IT companies to formalize their operations by facilitating the movement of funds, people, and hardware, as well as making infrastructure more affordable and promoting skills-based talent development.
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