Home Business Inconsistent tax laws, inflexible banking policies inhibit Pakistan’s IT sector

Inconsistent tax laws, inflexible banking policies inhibit Pakistan’s IT sector

4 min read

ISLAMABAD, June 06 (INP) – The IT sector has been growing steadily over the years, but it still lags behind its competitors in terms of investment, innovation, and global competitiveness.

The nation’s innovation and economic progress are greatly aided by the IT industry. Given how quickly the world is changing, Pakistan’s path to becoming a developed country depends on enhancing the potential of the IT sector.

Speaking to WealthPK, Nafees Hamid, software engineer at tkxel, a software company, said although Pakistan’s IT industry has been expanding, many obstacles still hinder its full potential. Challenges such as inconsistent tax laws cause uncertainty and make it hard for businesses to make long-term plans and investments.

He said tax laws and regulations were frequently changed, which discouraged foreign investment, stunted growth, and drove talent away. The government must enact uniform tax laws which offer an operating environment that is stable and predictable for IT companies.

The tkxel engineer opined that lowering tax rates for IT companies, simplifying tax laws and regulations, and establishing tax breaks for research and development and innovation would enable the country to draw in more foreign capital, promote entrepreneurship, and establish a competitive environment that will accelerate economic growth.

Talking to WealthPK, Dr Irfan Ullah, research analyst at Quaid-e-Azam University Islamabad, said inflexible banking policies were a major obstacle to Pakistan’s IT industry.

Financing startups and small IT companies is difficult due to the high interest rates and strict collateral requirements, which stifle innovation and growth. The banks need to lower the lending rates and collateral requirements, provide tailored financing options for IT firms, and expand funding for IT projects and initiatives.

He opined that the IT sector had immense potential, with a large number of skilled workers and innovative startups becoming well-known globally. A cooperative atmosphere between the banking industry and government is required to establish a competitive ecosystem to stimulate innovation, growth, and entrepreneurship.

“The government should develop the IT zones with state-of-the-art facilities and give incentives to draw capital and skilled labour and provide tax exemptions and other financial support to the IT startups and businesses to spur the expansion of the IT industry,’’ he suggested.

He also suggested establishing a strong cybersecurity framework to ensure data security and foster industry trust. In addition to supporting startups and entrepreneurs, establishing a national IT innovation fund would stimulate innovation and collaboration in IT initiatives by encouraging public-private partnerships.

Concluding, he said the Ministry of Information Technology and Telecommunication (MoITT) must reduce bureaucratic hurdles by simplifying and streamlining laws and regulations and cutting down the unnecessary paperwork about the IT sector.

Load More Related Articles
Load More By Web Admin
Load More In Business

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also

Boron extraction needed to meet industrial needs

ISLAMABAD, June 07 (INP) — Indigenous extraction of boron and its value-addition can…