Govt targets $1 billion increase in IT exports by 2025

ISLAMABAD: The government has announced plans to boost Pakistan’s IT exports from $3.2 billion in 2024 to $4.2 billion by 2025, despite acknowledging that a significant portion of these export revenues remains un-repatriated.

On Friday, Federal Finance Minister Muhammad Aurangzeb chaired a high-level meeting of the Prime Minister’s Committee on IT Export Remittances to explore strategies for improving IT remittance flows, which are crucial to the country’s digital economy and economic growth.

During the meeting, there was a strong emphasis on the need for access to global payment gateways, like PayPal, and the development of domestic solutions to support IT professionals and freelancers. These steps aim to enhance Pakistan’s global standing in the IT sector.

A statement from the Finance Ministry highlighted the minister’s acknowledgment of the IT sector as a rapidly growing industry that could play a pivotal role in generating foreign exchange. He called for a coordinated approach, consistent policies, and targeted reforms to unlock the sector’s full potential and increase the inflow of export remittances.

According to Business Recorder, the participants discussed both the opportunities and challenges faced by the sector, particularly the need to streamline capital movement to increase remittances. While IT exports are growing, a considerable amount of the sector’s revenue remains unremitted.

Simplified procedures, tax exemptions for freelancers, and addressing classification issues for remote workers and smaller IT firms were also mentioned as vital steps to encourage the repatriation of earnings.

Pakistan currently has 2.32 million freelancers, who account for 15 per cent of the country’s IT exports, yet only 38,000 of them have bank accounts.

While 500 new accounts are being opened weekly, according to State Bank of Pakistan (SBP) data, retaining these account holders and encouraging others to follow suit was highlighted as critical.

The SBP governor provided an update on measures being taken to address these issues, including simplified account-opening processes, awareness campaigns, improved complaint resolution systems, and prioritisation of the IT sector in banking frameworks.

In response to the IT sector’s demands, the SBP has raised the foreign exchange retention limit from 35 per cent to 50 per cent or USD 5,000 per month (whichever is higher). This move is aimed at encouraging freelancers and IT exporters to remit more of their earnings back to Pakistan.

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