The Pakistani government is exploring the possibility of offering tax exemptions to local startups in the upcoming fiscal year, according to a report by Dawn on Wednesday.
This initiative, discussed during a meeting chaired by Prime Minister Shehbaz Sharif, aims to incentivize growth within the country’s burgeoning tech sector. The proposed exemptions would specifically target startups operating in health technology, artificial intelligence, financial technology, and agriculture technology.
IT Minister Shaza Fatima Khawaja highlighted the current disparity between individual taxpayers and startups as a key motivation for the proposal. Individuals in Pakistan currently enjoy a zero tax rate, while those associated with startups face a 35% tax burden.
Prime Minister Sharif also emphasized the need for facilitating software exports. He instructed the central bank governor to address issues related to debit cards and foreign currency faced by software exporters. Additionally, he called for increased collaboration with the private sector to further support startups.
Looking towards the future, the government has set an ambitious target of achieving $25 billion in IT exports by 2029. This strategy hinges on expanding tech services and attracting captive IT businesses.
The meeting also shed light on the government’s broader vision for digitalization. The “Pakistan Digital Nation” project aims to leverage technology to streamline state affairs and bolster the national economy. Furthermore, the government plans to train roughly 1.5 million individuals in IT skills over the next five years.
Discussions also covered initiatives to establish international certification programs for IT professionals through public-private partnerships, develop three new IT parks, and create 250 “e-Rozgar” centers (employment facilitation centers). The government also aims to significantly expand mobile broadband coverage to 100 Mbps and increase fiber optic penetration to 12%.
Prime Minister Sharif underscored the immense potential of the IT sector in Pakistan and acknowledged the critical role of entrepreneurs in driving its growth. These combined initiatives signal a strong commitment from the government to fostering a thriving tech ecosystem in the country.
