Latest news with #MuhammadUmairNizam
Express Tribune
26-04-2025
- Business
- Express Tribune
IT firms demand major tax reforms
Listen to article Pakistan's Information Technology (IT) companies have strongly demanded the government to rationalise taxes on the IT sector in order to enhance its exports manifold in the coming years. Muhammad Umair Nizam, Senior Vice Chairman of the Pakistan Software Houses Association (P@SHA), called for a major reduction in the burden of income tax on employees' salaries from the current 35% to a flat 5% in order to facilitate IT companies in maintaining their exports growth. This step, he explained, would help IT companies match the competitiveness of remote workers in the IT sector who are paying a minimal tax rate of just 1% as freelancers. "P@SHA is looking forward to the government granting a 10-year tax holiday to encourage new foreign and domestic investments, the streamlining of foreign exchange regulations, greater facilitation from commercial banks, the removal of anomalies in sales tax, the allocation of dedicated funds for skill development and the acceleration of the operational materialisation of Special Technology Zones (STZs) and IT parks across the country," he said. He stressed that the government should urgently do away with the heavy 10% tax currently imposed on the transaction of debit cards linked to foreign exchange accounts, as this eats up a huge share of the earnings of IT companies and severely impacts their profitability. Highlighting the sector's potential, he said that information technology has now become the fastest-growing export industry of Pakistan, and the country is poised to achieve a record $4 billion in its IT exports for the fiscal year 2025, covering the period from July 2024 to June 2025. Nizam also pointed out that Pakistan is rapidly expanding into new sub-sectors and verticals across various spheres of technology, but expressed concern that conventional regulatory frameworks continue to create bottlenecks due to their inability to adapt to the fast-paced evolution of the global tech industry. "P@SHA's role is to translate the needs and demands of our member companies into policies, incentives, and actions. Whether it's about export taxation, ease of doing business, payroll taxation, international visibility, or digital infrastructure - we take those concerns straight to the power corridors," he added. Mehwish Salman, an award-winning serial entrepreneur and CEO of Datavault Pakistan, stated that the government must allocate a handsome portion of the national budget toward promoting emerging technologies, such as artificial intelligence, cybersecurity, the internet of things, and data engineering, to grow the country's exports and foster greater adaptation of digitisation across various sectors. In this regard, she said the government should continue its capacity-building programmes by partnering with IT companies to arrange boot camps in various cities, aiming to upskill working professionals and bring them up to par with global standards. Salman also stressed that the government should introduce subsidies for female professionals seeking certifications and specialised training, along with scholarships for female students, in order to encourage and significantly increase their contributions. "Through effective industry-academic liaison, we need to upgrade our curriculum based on emerging technologies at both private and public sector universities to meet the increasing demand for highly skilled human resources in the country's IT sector," she said. She further suggested that the applications of AI tools and coding should be introduced to students at the secondary school level, which would promote a culture of research, development, and innovation among the younger generation. Meanwhile, former Chairman of P@SHA, Muhammad Zohaib Khan, said that IT remains the only industry in Pakistan with an industry trade surplus in the vicinity of 75%, and pointed out that it is the only sector that can grow at an exponential rate, develop a skilled workforce, create employment opportunities rapidly, help curtail the country's growing trade deficit, and keep the current and external accounts healthy.
Express Tribune
26-04-2025
- Business
- Express Tribune
Pakistan's IT exports set to hit $4bn amid calls for tax reforms
Listen to article Pakistan's information technology sector expects exports to reach $4 billion in the current fiscal year, industry leaders said on Saturday, while urging the government to implement regulatory reforms and a decade-long tax holiday to maintain momentum. Reported in Arab News, the IT industry, a key pillar of Pakistan's economic strategy, has been prioritized under the 'Uraan Pakistan' initiative launched last December. The programme aims to boost IT exports to $10 billion by 2029, offering a potential lifeline to the country's struggling external accounts. Muhammad Umair Nizam, Senior Vice Chairman of the Pakistan Software Houses Association (P@SHA), said the IT sector had emerged as the country's fastest-growing export industry. Pakistan's IT exports stood at $3.2 billion last fiscal year, and are now projected to grow by 25% year-on-year to hit $4 billion in FY25. However, P@SHA warned that regulatory hurdles and inconsistent tax policies risk stalling progress at a critical time when new tech sub-sectors are rapidly developing. The association has submitted detailed budget proposals to the government, calling for an overhaul that includes streamlined foreign exchange regulations, better banking support, the removal of sales tax anomalies, and accelerated development of special technology zones and IT parks. Pakistan's IT sector is currently the country's only industry with a trade surplus of around 75%, highlighting its potential to create jobs, nurture skilled human capital, and help close the trade deficit sustainably, P@SHA noted. The group also flagged concerns over the disparity between income tax rates for salaried IT employees and freelancers, arguing that the current system discourages formal employment and must be urgently addressed in the upcoming federal budget. Industry leaders believe that with supportive policies, Pakistan's IT sector could achieve exponential growth and become a key driver of economic stability in the years ahead.
Arab News
26-04-2025
- Business
- Arab News
Pakistan's IT exports seen reaching $4 billion in FY25 as industry seeks tax relief
KARACHI: Pakistan's information technology (IT) sector expects exports to reach $4 billion in the current fiscal year and seeks regulatory reforms and a 10-year tax holiday to sustain growth momentum, said the country's top software association on Saturday. The IT sector is one of Pakistan's priority industries as the country looks to boost export revenues and stabilize its external accounts. Under the government's 'Uraan Pakistan' initiative, launched last year in December, Islamabad aims to raise IT exports to $10 billion by 2029. Industry leaders say IT remains one of the few sectors capable of exponential growth despite the broader economic challenges. 'Muhammad Umair Nizam, Senior Vice Chairman of Pakistan Software Houses Association (P@SHA), has apprised that information technology has become the fastest growing export industry of Pakistan – and, the country is set to achieve $4 billion in its IT exports for the FY25,' the software association said in a statement, adding that Pakistan's IT exports stood at $3.2 billion in the last fiscal year with the prospect for a 25% year-on-year growth. However, P@SHA warned regulatory bottlenecks and inconsistent tax policies were hampering the sector's expansion at a time when new tech sub-sectors were emerging. The association said it had also submitted detailed budget proposals to the government, seeking a facilitative framework that includes streamlined foreign exchange regulations, banking sector support, removal of sales tax anomalies and accelerated development of special technology zones and IT parks. Pakistan's IT industry is the only sector with a trade surplus of around 75%, the statement said, underlining its potential to create jobs, develop skilled human capital and reduce the trade deficit on a sustainable basis. The software association also raised concerns over income tax disparities between salaried employees and freelancers, saying the current structure discourages formal employment and needs urgent correction in the upcoming federal budget.
Express Tribune
19-04-2025
- Business
- Express Tribune
IT sector eyes window of opportunity
Listen to article IT companies appear to be optimistic about ramping up exports to various high-potential markets after the United States of America (USA)'s new administration announced new reciprocal tariffs in a vast array of countries. The tariffs will scale up the burden of operational costs for exporters in a host of countries. The Trump administration, however, has yet to impose tariffs on the services sector, while the tech sector has also escaped the new policy. Pakistan Software Houses Association (P@SHA) Senior Vice Chairman Muhammad Umair Nizam said the recent escalation in global tariffs is triggering a significant recalibration of global supply chains. This presents a unique window for Pakistan's IT industry to step forward as a credible, competitive, and stable outsourcing destination. With the growing demand for de-risked, cost-effective outsourcing partners, Pakistan is exceptionally positionedoffering up to 70% cost savings compared to Western markets, a highly skilled tech workforce, and a vibrant startup ecosystem. IT exports reached $2.8 billion by March 2025, marking a 23% year-on-year growth and reflecting the industry's resilience and capacity to scale. Monthly exports in March 2025 stood at approximately $348 million, continuing a consistent upward trend for the straight 18th month in a row. This performance is no coincidenceit is backed by meaningful reforms and facilitation measures introduced by the Ministry of IT & Telecom (MoITT) and the Special Investment Facilitation Council (SIFC). From expanding permissible foreign currency retention limits to accelerating IT park development and streamlining policy for foreign investment, these efforts are enabling Pakistani IT firms to become globally competitive. "I believe that the government should announce an out-of-the-box special package for the IT industry which would enable us to achieve accelerated growth by fully capitalising on this opportunity," he said. With targeted branding, trade diplomacy, and ease-of-doing-business reforms, Pakistan can cross $5 billion in tech exports in the next 1824 months. In this new global reality, Pakistan is not just an alternativeit is the smart choice for global enterprises seeking innovation, reliability, and value, Umair Nizam said. Pakistan's IT exports are concentrated in the North American region. It is followed by European countries and the Middle East. CEO Hexalyze Saad Shah said Pakistan makes space in the global markets due to the outcomes of the tariffs imposed on the countries. It is because of the fact that Pakistan is considered to be one of the best and most affordable countries for outsourcing the IT business, he said. Joint ventures of various companies from a large number of countries are the other options to acquire handsome business from a good number of clients. When it comes to some useful initiatives, there is an urgent need for major tasks for enhancing penetration in certain markets to work on marketing and branding in different countries and build the capacity of human resources through training and education. The government and IT representative bodies should collaborate with different training programmes of welfare organisations to prepare human resources in required fields. With three months left in the financial year, it is expected the IT exports may settle in the range of $3.53.7 billion. Under the Uraan programme, the government sets an annual target of $10 billion in IT exports by the end of FY29.
Express Tribune
19-02-2025
- Business
- Express Tribune
With policy support, IT exports surge above $2b
In the age of information technology, such initiatives are very important and necessary to promote the culture of research amongst students, according to the Sindh governor. PHOTO: AFP Pakistan's information technology (IT) exports continued their upward trajectory, surging above $2 billion due to consistent penetration of local industry into foreign markets with active support from government measures and policies. According to the State Bank of Pakistan (SBP), exports of IT and IT-enabled services surged to $2.17 billion in seven months (Jul-Jan) of the current financial year as compared with exports of $1.72 billion in the same period of last year, showing a double-digit growth of 27%. The jump in IT exports comes in the wake of a growing client base globally of Pakistani IT companies, especially in the Gulf Cooperation Council (GCC) region, relaxation in the permissible retention limit by the SBP, which increased it from 35% to 50% for the Exporters' Specialised Foreign Currency Accounts, permission for equity investment abroad through these foreign currency accounts and stability of the Pakistani rupee that encouraged IT exporters to bring a higher proportion of profits back to Pakistan. Pakistan Software Houses Association (P@SHA) Senior Vice Chairman Muhammad Umair Nizam said the continued momentum in Pakistan's IT exports reflected the strength and global competitiveness of the IT sector. This success is driven by the expanding client base of Pakistani IT firms, particularly in the GCC region, as well as key policy measures, including the increase in the permissible retention limit and the introduction of overseas equity investment. IT exporters acknowledge the vital role played by the Special Investment Facilitation Council (SIFC), the Ministry of IT and Telecommunication and the Pakistan Software Export Board (PSEB) in supporting the sector. Their initiatives have provided much-needed policy stability, improved regulatory frameworks and facilitated investment opportunities for IT companies. However, it is crucial that policy decisions are made in close consultation with P@SHA and industry stakeholders to ensure that they address real challenges and maximise relief for exporters, he said. He urged the government to continue prioritising industry-friendly policies to enable Pakistan to emerge as a leading technology hub. Exports in January 2025 stood at $313 million, higher than the last 12-month average of $303 million. This is the 16th consecutive month of year-on-year (YoY) growth in IT exports, starting from October 2023. Pakistani IT companies are active in engaging with global clients through participation in trade fairs such as Oslo Innovation Week and Pak-US Tech Investment Conference. IT exporter Mehwish Salman Ali said IT companies should explore emerging markets in innovative fields including AI, data storage, cybersecurity and the like to win handsome orders. A host of countries, including the US, Saudi Arabia and the United Arab Emirates, have come up with better investment plans for AI projects, which should be focused by Pakistani companies and the government, she said. IT exporters should also work on the capacity building of human resources in emerging fields through skill development programmes in collaboration with universities and software houses, Mehwish Salman Ali, who is the CEO of Datavault, said. Analysts of Topline Securities forecast that the IT sector would continue its growth trajectory and momentum with likely growth of 10-15% in FY25 to $3.5-3.7 billion.
