ISLAMABAD: The information technology (IT) industry has refuted the claims of the government that the country’s IT exports were on a growth path and instead said Pakistan will miss the export target by around $1 billion in the outgoing fiscal year.

The report titled “Why the planned growth was not achieved” was finalised by Pakistan Software Houses Association for IT and ITeS (P@SHA). It highlighted five reasons for restricting its upward movement, which include the establishment of the Special Technology Zone Authority (STZA).

The report, set to be launched next week, has criticised the government for establishing the STZA, on the grounds that the focus of the STZA has been diluted and not aligned with the IT export growth.

P@SHA has said that there was no stakeholder representation in STZA, despite the fact that the Authority was launched in January this year, yet these tech zones have not been enabled for the existing IT and IT-enabling services industry (ITeS).

The P@SHA report, also to be presented to the Ministry of IT, has said that the overall growth in the IT/ITeS industry was still present but the data shows the growth rate trend has declined during 2021-22.

“The only change this year from last year is the change in the tax regime, which has affected the potential growth,” the report said, “During 2020-21 there was 47 per cent growth in IT/ITeS industry, and if the same trend was followed the IT industry would have crossed the target of $3.5 billion for the current fiscal year.

The IT and ITeS exports in the last fiscal year were $2.1bn, and the target for 2021-22 was set at $3.5bn, the industry has estimated that the exports by June 30, 2022 will be limited to $2.6bn only.

The reasons highlighted by P@SHA are changes in the tax regime.

It has been highlighted that tax exemption was the only incentive given to the IT/ITeS industry and was committed till 2025.

In 2021, it was changed to a controversial tax credit regime without consulting the industry and ministries of IT.

Published in Dawn, June 5th, 2022