BEIJING, December 22 (inp): The eye-catching Pakistan’s digital transformation policy gets worldwide recognition and China also appreciates it and is looking forward to strengthen its collaboration with the brotherly country in the IT sector.
According to a report published by the Gwadar Pro mobile news APP, the digital policy recently launched by Prime Minister Imran Khan will usher a new ear of all-pronged digitalization and at the same time, a dramatic technological transformation of the country.
The initiative, though is expected to meet underlying challenges and drawbacks, is in no way groundless.
At the Silicon Valley conference in San Jose, Calif., backed by the Pakistani government in mid-October, the Pakistani ambassador to the United States and one of the conference speakers said, “If I were to look at our overall economic performance, the IT sector comes out as one that has performed the best.”
The report acknowleded that Pakistan’s Digital Policy served as the foundation pillar for the construction of a holistic Digital Ecosystem in the country with advanced concepts and components for the rapid delivery of next generation digital services, applications and content.
Moreover, it means to improve citizens’ quality of life and economic well-being by ensuring availability of accessible, affordable and reliable high quality ICT services.
It was noted that the policy includes incentives and promotional initiatives for the sector: 100% foreign ownership allowed; 100% repatriation of capital & dividends (subject to SBP Approval); IT & ITeS Export Income Tax exemption till June 2019 (Extended till 2024 just recently); and Income tax holiday for Venture Capital companies/funds till June 2024.
According to the report, incentives have been proved to be effective in attracting long term investments, improve export remittances and proliferate new IT parks through technology SEZs throughout the country.
Statistics from Pakistan Software Export Board (PSEB) show that the country’s software exports grew by 2.4 per cent to $1.09 billion during 2018-19, from $1.06bn in the last fiscal year. The total size of the software sector is approximately $6.5 billion, which is expected to grow at least 3.5 percent in the next five years.
Local application developers, freelancers, and IT companies are another driving force behind the success of the computer software sector in Pakistan.
The report noted that there are approximately 1,500 registered local companies involved in a variety of applications development for domestic and corporate use. The majority of high-end companies are involved in the development and distribution of enterprise resource management and customized solutions for specific industry sectors.
The analysis by the U.S. Commercial Service of the U.S Department of Commerce shows that there is a growing interest from local companies and freelancers to enter the online space, especially after the launch of 3G and 4G cellular spectrums in Pakistan.
The majority of these development activities involve consumer applications based on Android or Apple platforms, website development, e-wallets/payments, e-commerce, and online gaming. Most foreign firms operate either through their appointed local distributor or by having their own office with fully-equipped technical and support teams to cater to their customers’ needs.
Major international software brands from the United States, the United Kingdom, Germany, Spain, and China have already established a strong presence in Pakistan.
In a report issued by Trade Development Authority of Pakistan (TDAP), it notes that the IT sector in Pakistan has been growing for the last two decades but the sector lacks sustainability in its business model. Enterprises/ ventures in IT sector are initiated on project basis and wind up upon the completion of those projects, the report added.