China to support development of Pakistan’s IT sector

BEIJING: China-Pakistan cooperation in the IT sector will play a significant role in the development of Pakistan’s IT industry and the implementation of its digital strategy, according to Cheng Xizhong, a visiting professor at Southwest University of Political Science and Law.

As he met with senior executives of Chinese enterprises during his recent visit to China, Prime Minister Imran Khan said the IT industry has great potential to attract investments, create tax revenue, and drive economic growth.

Prof Cheng, also former defense attaché in South Asian countries, said in an article that more and more Chinese IT companies are investing and setting up in Pakistan due to Prime Minister Imran Khan’s encouragement.

In order to stimulate the development of information technology and information industry, the Pakistani government has announced record incentives and also ensured the immediate solution of the issues faced by the IT sector.

Last August, Minister for Finance and Revenue Shaukat Tarin approved the establishment of a fund with a total amount of Rs.10 billion for stimulating the development of the IT industry. The main measures include giving cash bonuses to IT export enterprises, providing a 5% export tax rebate, allowing foreign IT companies to transfer home their profits, and allowing freelancers to open special accounts in US dollars to collect their IT export income.

He said, the recent announcement of a special tax relief package for the IT industry by the Pakistani government is a more encouraging decision that will help boost the country’s exports. Despite the pandemic, the export of Pakistan’s IT industry bucked the trend in the fiscal year 2019-2000, with the export volume reaching $1.5 billion, a sharp increase of 24% year-on-year. In the current fiscal year, it is expected to surpass the target of $3.5 billion. By the fiscal year 2022-2023, the export goal of more than $5 billion set by the Pakistani government will be achieved.

At the same time, the Pakistani government attaches importance to IT education. So far, around 2.2 million students, including those from remote areas, have joined a course on digital skills. Work in the IT sector is not restricted by region or gender, so it is playing a key role for women empowerment by allowing them to work from home, he added.

Due to far-reaching nationwide transformation initiatives such as China-Pakistan Economic Corridor (CPEC) and Pakistan Vision 2025, the Pakistani government is now outlining digital economy transformation agendas.

From textile, food, agriculture, and telecommunications sectors to healthcare and fashion industries, Pakistan is increasingly adopting digitalization to keep up with the fast-evolving environment.