IT companies operating in Pakistan will now be permitted to keep half of their export earnings in US dollars in a local account, according to a government announcement.
The Special Investment Facilitation Council (SIFC) and the State Bank worked together to facilitate this move, which attempts to alleviate the difficulties experienced by IT companies who were previously forced to store their money overseas due to regulatory constraints.
The change is a reaction to the particular requirements of the IT sector, where businesses frequently have to pay salaries to foreign workers who collaborate with overseas clients and pay monthly costs for cloud hosting, marketing, and sales on websites like LinkedIn, Google, Amazon, Azure, and others.
The State Bank and SIFC worked together to accomplish this policy intervention, which allows IT companies to retain a larger share of their export revenue in Pakistan, as underlined by Caretaker IT Minister Dr. Umar Saif. These businesses can now spend the retained dollars for foreign expenses without any restrictions thanks to the new flexibility.
Positive effects of this legislative shift are already being seen, as IT companies are beginning to repatriate their funds. The IT sector’s export revenue has increased by an astounding 14% in just one month following the intervention, which is a 20% growth over the same period last year.
In his optimistic assessment of the IT industry’s future, Dr. Saif said that the nation will soon surpass $3 billion in IT exports if its current growth rate keeps up.
He reaffirmed the government’s determination to aid in the growth of the IT industry and its audacious target of generating $10 billion in export income from IT.
It is anticipated that this change in legislation will make it easier for IT businesses to carry out their financial activities domestically, which will support the expansion and prosperity of Pakistan’s IT sector as a whole.
The government is still committed to creating an atmosphere that supports the IT industry’s growth and hitting significant export revenue benchmarks soon.
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