Pakistan’s IT industry is growing exceptionally fast due to competent youth coming with innovative ideas and outsourcing services that increase revenue and employment. The IT sector has a tremendous potential to lead the country’s economy toward its growth trajectory path, but for this purpose, the sector still needs to be exploited more.
In 2018, Google recognised Pakistan for rapidly turning into a digital-first country. Pakistan is known for its software development, business process, and freelancing of IT-related services. Presently, it has the fourth-largest growing freelancer market globally.
Currently, Pakistan’s IT industry contributes around seven per cent to its GDP. It employs hundreds of thousands of professionals who work in different areas such as banking, telecommunications, healthcare, education, etc. According to the Economic Survey of Pakistan (2020-2021), the compound annual growth rate for IT and related services crossed 18.85 per cent, the highest growth rate of any industry in the region.
The current rise in the IT industry has resulted in the provision of high-paying jobs for professionals by generating well-paid employment opportunities. It has also supported the government and private businesses to prosper. According to the State Bank of Pakistan, Pakistan’s IT exports during FY2020-2021 increased by 47.4 per cent and reached a $2 billion milestone for the first time in its history.
To give a push to IT exports, the government of Pakistan has announced providing an incentive package to the country’s IT and Telecom sectors. This incentive package aims to meet the remittances target of 15 billion dollars in the next two years by increasing IT exports.
The package includes exemption from duties and taxes on the establishment of cloud infrastructure, provision of a grant of 0.5% of annual IT export revenue to the Pakistan Software Export Board (PSEB), and a reduction in duties and taxes on laptops and other IT equipment along with harmonisation of advance income tax on telecom services to 8%.
Furthermore, the government is taking significant steps to boost international collaboration by expanding business ties with the current top export partners and signing double tax avoidance treaties.
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