June 27, 2022 – The Pakistan Software Houses Association (P@SHA), which represents over 1,000 member companies, has raised concerns over the budget for the fiscal year 2022-23 and termed it “disastrous” to the growth of the IT industry in Pakistan.
In a press release dated June 25, P@SHA disapproved of the budget and lamented that none of its demands were taken into account. It stated that despite ambitious remarks made by Prime Minister Shehbaz Sharif to target $15 billion in IT and IT-enabled exports, the budget not only abandons but decimates the industry’s ability to deliver on this target.
“The currently implemented regressive taxation regime has already proven disastrous to the industry’s growth,” said Chairperson P@SHA Badar Khushnood. “This year’s targeted exports of $3.5 billion are also not being achieved due to the introduction of an inefficient tax regime. Rather than facilitating the IT industry with better benefits, i.e., ‘tax exemption’ committed till 2025 has been abruptly reneged and revoked.”
He termed the budget “a recipe for disaster for a nascent yet fastest growing exports-led sector”.
“In 2021, the IT industry crossed exports of over $2.1 billion,” said Khushnood. “The industry had the unique distinction of being Pakistan’s only export industry with a 75 percent trade surplus since the key raw material for IT exports is ‘skilled human talent’, which is already available in the country so there is no need for any imports to grow IT services exports.”
The chairperson said that IT has proven to be the “fastest-growing” industry in the country by supporting the livelihoods of 600,000 professionals and over 10,000 companies. He further added that the IT industry has demonstrated the potential to address the current account deficit with a strong, self-reliant, and sustainable financial future for Pakistan. “In 2022, the IT industry is expected to become the second largest export sector crossing all traditional sectors.”
The statement reads that the budget has raised concerns over the future of tech startups and freelancers in Pakistan. “Rather than ensuring continuity of policy, the budget draft has not only spread a wave of uncertainty and disappointment in the IT industry but has also created doubts about the government’s understanding and political will to support the only sector that has the potential to solve Pakistan’s economic crisis in the shortest possible time with the least amount of resource requirements.”
Not a single demand of the IT industry has been met in this budget, added the chairperson.
“We are left with a very short window of opportunity before it’s too late and hope that the decision-makers at the highest level will understand the IT industry’s challenges and facilitate continuity of policy for a better and stronger Pakistan,” remarked Khushnood.
