In January 2024, the export remittances for IT and IT-enabled Services (ITeS), which include call centre and computer services, climbed by almost 39% year over year to $190 million from the same time the previous year.
Topline Securities claims that the State Bank of Pakistan (SBP) relaxed the allowable retention limit in Exporters’ Specialised Foreign Currency Accounts, raising it from 35 percent to 50 percent, and that the stable PKR currency encouraged IT companies to repatriate their foreign income and deposit it in local accounts, which is why there was a YoY increase in exports.
During the first seven months (JulyJanuary) of the current fiscal year 202324, the sector export remittances climbed by around 12.7%, staying at $1.720 billion as opposed to $1.525 billion during the same time of the previous fiscal year.
According to official data, remittances from ITeS exports fell by around 12.6% on a month-over-month (MoM) basis in January 2024, staying at $265 million as opposed to $303 million in December 2023.
Information, computer, and communications services (ICT) export remittances had a negative growth rate of over 1%, with $2.597 billion in the fiscal year 20222023 compared to $2.619 billion in the fiscal year 20212022.
Dr. Umar Saif, the acting federal minister for telecommunications and information technology, unveiled the nation’s first-ever IT and ITeS export strategy, aiming to raise Pakistan’s IT exports to $10 billion in the next three years. The country’s export revenue might reach $1215 billion.
The country’s $15 billion export potential for the information technology sector is being hampered by a number of obstacles, including inconsistent policy, taxation, and banking. These have been recognised by the Ministry of Information Technology and Telecommunications.
Exports of IT and ITeS have increased phenomenologically during the last five years, expanding by 178% at a cumulative annual growth rate (CAGR) of 30%, according to official documents. Among the local services industries, this one is growing at the fastest rate; it is even faster than the textile industry, which has risen by 148%.
Nonetheless, a number of limitations and obstacles are impeding the expansion of exports of IT and ITeS. The trust of foreign and local investors, clients, and partners, as well as trade associations and governmental organisations, has been damaged by inconsistent policy implementation.
One such instance is the periodic adjustments made to the tax laws governing export proceeds from IT and ITeS.