Saturday, March 2, 2024

Govt to Allow IT Companies to keep 50% Export Revenue in Dollars in Pakistani Account

The government has announced that Information Technology (IT) companies in Pakistan will now be allowed to retain 50% of their export revenue in dollars in a local account.

This decision facilitated by the Special Investment Facilitation Council (SIFC) and the State Bank, aims to address the challenges faced by IT companies that previously had to keep their dollars abroad due to restrictions.

The move comes as a response to the unique needs of the IT industry, where companies often have to pay salaries to international employees working with foreign clients and cover monthly expenses for cloud hosting, marketing, and sales on platforms such as Google, Amazon, Azure, LinkedIn, and others.

Caretaker IT Minister Dr. Umar Saif highlighted the collaborative effort with SIFC and the State Bank to implement this policy intervention, allowing IT companies to keep a more significant portion of their export revenue within Pakistan. The new flexibility enables these companies to use the retained dollars for international expenses without facing any restrictions.

The impact of this policy change has already begun to show positive results, with IT companies starting to repatriate their dollars. In just one month since the intervention, the export revenue of the IT sector has witnessed a remarkable 14% increase, representing a 20% growth compared to the same period last year.

Dr. Saif expressed optimism about the trajectory of the IT industry, stating that if this growth rate continues, the country is on track to surpass $3 billion in IT exports within a few months.

He reiterated the government’s commitment to supporting the IT sector’s expansion and its ambitious goal of reaching $10 billion in IT export revenue.

This policy shift is expected to create a more favorable environment for IT companies to conduct their financial transactions within the country, contributing to the overall growth and success of the IT industry in Pakistan.

The government remains focused on fostering an environment conducive to the upward trajectory of the IT sector and achieving substantial export revenue milestones in the near future.

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