PM directs officials to create a massive incentive package for the IT sector in the budget.

Today, Prime Minister Shehbaz Sharif presided over a high-level conference in Islamabad to develop information technology in fiscal year 2023-24.

According to a press statement from the PM Office Media Wing, the Prime Minister (PM) issued instructions to finalise budget plans for the development of the Information Technology and Telecom (IT&T) sector.

The Prime Minister urged officials to enhance IT sector revenue to $4.5 billion in FY24 and to prepare a large incentive package for the sector in the upcoming fiscal year budget. He encouraged the creation of a new fixed tax structure for the IT sector and directed pertinent agencies to provide ideas in this respect as soon as possible.

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Startups and Businesses Get Special Treatment

The meeting was updated on the status of the IT&T sector. With the new budget, the government is reportedly taking attempts to enhance IT sector exports. According to the meeting, about 45,000 teenagers are presently undergoing vocational training in the IT sector, and upon completion of their training, they will be self-sufficient in terms of employment and will also assist develop additional jobs in their particular industries.

The premier decided to offer in-principle approval for special concessions to local IT enterprises and startups by simplifying access to contemporary technology and IT-related breakthroughs critical to the sector.

The prime minister stated that the new budget will include a large investment in vocational training for young people, as well as a proposal to give 100,000 laptop computers based on merit.

PM’s Youth Programme Expansion, Tax Breaks

The meeting authorised a specific strategy for expanding the Prime Minister’s Youth Skill Development Programme and establishing special IT Training Zones. In addition, officials decided to require IT companies and freelancers to retain 35% of their export revenues for three years in order to boost the sector’s efficiency.

The Prime Minister stated that IT companies operating in Special Technology Zones will be eligible for tax breaks in the 2019 budget. He stated that subsequent adoption of IT-related budget recommendations would contribute in the creation of new job opportunities in the country.

The prime minister asked officials to organise IT roadshows abroad and to conduct additional research on facilities critical to the sector’s growth. He also urged the authorities to take steps to provide specific counselling and help to young people starting new businesses in the IT sector.

The meeting was attended by Federal Ministers Ishaq Dar, Syed Aminul Haque, Maryam Aurangzeb, Prime Minister’s Adviser Ahad Cheema, Minister of State Aisha Ghaus Pasha, Special Assistants Tariq Bajwa, Jahanzeb Khan, Tariq Pasha, Shaza Fatima Khawaja, Senator Afnanullah, Governor State Bank of Pakistan, Chairman Federal Board of Revenue, and other senior officials.

The meeting was also attended by Systems Limited CEO Asif Peer, PTCL CEO Hatem Bamatraf, Vice President Jazz Mudassar Hussain, and Deputy CEO Telenor Kamal Ahmed. PM All for incentives, but how about some extra cash?

It is worth noting that in May, IT sector stakeholders met with the Prime Minister to discuss budgetary suggestions, with the primary goal of rapidly increasing Pakistan’s IT and ITeS exports. The rationale behind the stakeholders’ suggestions to the government was that it should earmark upwards of Rs. 13 billion for the IT industry in the Finance Bill.

The government intends to decrease costs and has recommended a Rs. 6 billion budget for Ministry of IT and Telecommunication projects, compared to a Rs. 24.25 billion demand. The government also rejected the allotment of cash for 12 new IT Ministry initiatives, instead allocating Rs. 10 million to one scheme in FY24.