1. Home
  2. business
  3. P@SHA Disappointed with Pakistan's IT Budget

P@SHA Disappointed with Pakistan's IT Budget

Web DeskJune 17, 2024 05:38 AMbusiness
  • Higher income taxes and doubled GST alarm IT industry in Pakistan
  • Risk of brain drain and hindrance to digitalization efforts
  • Calls for balanced approach to support industry growth and progress
P@SHA Disappointed with Pakistan's IT BudgetImage Credits: pakistantoday
The recent budget in Pakistan sparks concerns in the IT industry due to higher income taxes and doubled GST on IT hardware, risking skilled professional loss and hindering digitalization efforts. P@SHA expresses disappointment in the lack of support for industry growth, calling for a balanced approach to ensure stability and progress.

The recent budget for the fiscal year 2024-2025 has sparked concerns within Pakistan's Information Technology (IT) industry. The introduction of higher income taxes for skilled salaried individuals and the doubling of the General Sales Tax (GST) on IT hardware have raised alarms among IT professionals and experts.

Skilled individuals in the IT sector are facing potential brain drain due to increased income taxes, while the rise in GST on IT hardware from 5% to 10% is hindering digitalization efforts. These changes could have a negative impact on the growth and stability of the IT industry in Pakistan.

Experts highlight the significance of the IT sector in generating revenue through IT exports, which could reduce reliance on international financial institutions. However, challenges in transferring funds internationally and the burden of increased taxes on computer hardware purchased at high exchange rates are major concerns for IT companies.

The Chairman of the Pakistan Software Houses Association (P@SHA) expressed disappointment in the budget's lack of support for the IT sector's growth. Criticisms have been directed towards the government's fiscal policies, particularly regarding taxes on foreign funds and the allocation of funds mainly for government projects and IT parks.

Experts warn that the changes in income tax slabs and the increase in GST on IT hardware could lead to the loss of skilled professionals and hinder digitalization efforts. Calls have been made for a balanced approach and stronger regulatory enforcement to support legitimate market growth and technological progress.

The future of Pakistan's IT sector is at a critical juncture, with the need for policy adjustments to ensure industry stability and growth. The government's current tax strategy risks prioritizing short-term gains over long-term development, highlighting the importance of addressing these concerns to safeguard the IT industry's future and contribute to Pakistan's economic advancement.

Related Post