On Monday, during a meeting of the Senate Committee on Commerce, Former Finance Minister Senator Shaukat Tarin revealed that Pakistani information technology freelancers have parked $3-4 billion abroad and are hesitant about bringing money into the country due to high taxes. While this is a significant figure, it does not really come as a surprise given the number of obstacles the IT industry faces in the country.

Mr Tarin rightly emphasised the need to provide incentives to the IT sector and that freelancers should be given tax exemptions and be allowed to open 100 percent of foreign currency accounts, if only he had done this himself as Finance Minister. Freelancers can be a great source for dollar inflows into the country and according to some estimates, they attracted remittances worth $400 million in FY 2022. However, they are faced with a lot of hindrances when making international transactions and have to pay exorbitant amounts of tax. This is something that should be taken up with commercial banks in order to allow for foreign currency accounts with nominal exchange fees.

There is also another dimension to this issue as freelancers also resort to unofficial methods to bring back earned money, however this is another area we fail to take advantage of because of our outdated policies. In order to enhance Pakistan’s IT exports, it is imperative that we bring payment gateways such as PayPal and others into the country. While officials claim that they are in talks with companies such as PayPal to initiate services in Pakistan, we are already far behind the curve and the pace of our progress leaves a lot to be desired.

Pakistan is currently the 37th largest e-commerce market in the world and is growing rapidly. This industry has the potential to enhance the country’s exports significantly, which is something that we need desperately. However, this will only be possible if the sector is allowed to grow and professionals are given the right incentives. Trust has to be built and it has to be conveyed to freelancers that Pakistan can be a lucrative market for them, otherwise the country will continue to waste the immense potential that this industry offers.