In this cash-strapped inflationary economy, there are hardly any goods or deliverables that have escaped a rise in prices or taxes. One industry however has remained on the backburner when it comes to inflation; the digital economy has so far remained relatively unscathed from the weekly announcement of yet another price hike or new tax. However, this may not remain the case for too long. Upon talks of taxing digital income, the Prime Minister’s Advisory Council on Information Technology (IT) and Digital Economy, suggested that there should not be any new taxes and/or procedures for IT, freelancers, E-commerce and startups to facilitate domestic digital transformation and growth in exports.
The Advisory Council’s advice is merited and should be followed by the government. The digital economy is a world apart from how we have traditionally dealt with finance and the economy. Firstly, the IT industry is already at a disadvantage, and IT professionals in Pakistan have to face far more difficult circumstances than their counterparts in other countries.
There is a lack of support from the State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR) when it comes to amplifying and championing IT. The government has only recently recognised the potential of the IT industry, and in the past few years attempted to bring forth reforms to ease the barriers to entry—like working on the payment gateways to resolve the payment issues of the IT industry, setting up a few new software technology parks, and most importantly expanding connectivity and internet accessibility. Those measures have brought good returns, speaking to the idea that digital is the future.
IT and IT-enabled services (ITeS) are the fastest growing areas that would help grow Pakistan’s foreign currency reserves, therefore, the government should ensure ease of doing business and policy continuity as much as possible. The government must set aside politics and consult the special technology zones authority set up by previous governments, that conduct research on implementing comprehensive duty and tax incentives for IT companies. These are untested waters for which experts and young blood are needed, and it is hoped that all stakeholders are consulted before any big decisions are taken.
The Advisory Council’s advice is merited and should be followed by the government. The digital economy is a world apart from how we have traditionally dealt with finance and the economy. Firstly, the IT industry is already at a disadvantage, and IT professionals in Pakistan have to face far more difficult circumstances than their counterparts in other countries.
There is a lack of support from the State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR) when it comes to amplifying and championing IT. The government has only recently recognised the potential of the IT industry, and in the past few years attempted to bring forth reforms to ease the barriers to entry—like working on the payment gateways to resolve the payment issues of the IT industry, setting up a few new software technology parks, and most importantly expanding connectivity and internet accessibility. Those measures have brought good returns, speaking to the idea that digital is the future.
IT and IT-enabled services (ITeS) are the fastest growing areas that would help grow Pakistan’s foreign currency reserves, therefore, the government should ensure ease of doing business and policy continuity as much as possible. The government must set aside politics and consult the special technology zones authority set up by previous governments, that conduct research on implementing comprehensive duty and tax incentives for IT companies. These are untested waters for which experts and young blood are needed, and it is hoped that all stakeholders are consulted before any big decisions are taken.
