The government has acknowledged that a significant portion of IT export revenue is not being remitted back to Pakistan and is targeting an increase in IT sector exports from $3.2 billion in fiscal year 2024 to $4.2 billion in fiscal year 2025.
Federal Minister for Finance, Senator Muhammad Aurangzeb, chaired a high-level meeting of the Prime Minister’s Committee on IT Export Remittances on Friday. The meeting aimed to find ways to improve the flow of IT export remittances, which are vital for Pakistan’s economic growth and digital economy.
The discussion highlighted the urgent need for global payment gateways like PayPal and similar solutions within Pakistan to support IT professionals and freelancers, helping the country compete globally.
In a statement, the Finance Ministry emphasized the IT sector’s significant potential to drive foreign exchange earnings. Minister Aurangzeb stressed the importance of a collaborative approach, stable policies, and reforms to fully realize this potential and ensure the repatriation of foreign earnings.
The meeting also addressed various challenges faced by the sector, particularly the need for simpler procedures and tax exemptions for freelancers, along with clearer classifications for remote workers and small IT businesses. These changes would create a better environment for IT companies to remit earnings.
Despite having 2.32 million freelancers, who contribute 15% of IT exports, only 38,000 hold bank accounts. However, efforts are underway, with 500 new accounts being opened weekly, according to data from the State Bank of Pakistan (SBP). Retaining these account holders and encouraging others to open accounts is seen as crucial.
SBP Governor updated the committee on measures being taken, such as streamlining account opening processes, awareness campaigns, and prioritizing the IT sector in banking services. In response to the sector’s demand, the SBP raised the foreign exchange retention limit to 50% or USD 5,000 per month (whichever is higher), up from 35%. Additionally, banks have been directed to simplify account opening for freelancers and IT companies, improving access to banking services for the sector.
