Sindh Govt To Reduce Sales Tax On IT, Software Business From 13% To 3%: CM Murad

KARACHI, (UrduPoint / Pakistan Point News - 14th Jun, 2022 ) :Sindh government is all set to provide tax relief to the IT industry by reducing the Sindh Sales Tax on IT, software business and on call centres from 13 percent to 3 percent, while a five-year IT policy will also be unveiled soon.

It was announced by Chief Minister (CM) Syed Murad Ali Shah while addressing a seminar titled Ease of Doing Business for IT/ITeS Industry here on Monday. The Federal minister for Information Technology also spoke at the seminar that was organized by Sindh Information Science and Technology department in collaboration with Pakistan Software Export board (PSEB) and PASHA.

The CM said that relief to the IT industry would be announced in budget speech on Tuesday in which rate of Sindh Sales Tax on IT, software business and on call centres would be reduced from 13 percent to 3 percent without input tax credit. However, large establishments which prefer standard rate with input tax credit, shall have the option of 13 percent with input tax credit facilities.

Murad said that his government was committed to facilitating the IT sector by providing fiscal and non-fiscal incentives and projects for enhancing IT exports from Sindh through policy interventions and procurement regulations to promote use of local IT solutions.

He said that Sindh government planned to roll out enabling IT infrastructure across the province with the help of PSEB while it was also in the process of adopting Sindh's first "cloud first policy" that would be unveiled in the first quarter of the fiscal year 2022-23.

The policy would promote coordination with the federal government for broadband for all, to develop Software and IT Parks and to incentivize Cloud services for cloud adoption by the government to provide economical services to start-ups and IT companies, he said.

Sindh government, he said, had planned to initiate multiple skill building programmes in the next financial year including High-end boot-camps for the youth, Skill building for teachers and trainers, Digital literacy for Primary and secondary schools, Skill program for Girls and Skill and freelancing programs for differently abled persons.

In order to re-engineer the existing government processes and introduce innovative citizen services for engagement of youth, the government of Sindh was focusing on different programs including `Promote startup culture through incubators and accelerators', Private Equity (PE) and Venture Capital (VC) funding, and Start-up induction in government operations or services and special incentives for women-owned start-ups, he added.

Talking about E-governance, the CM said that automation of government operations was a fundamental building block for efficient and effective governance and Sindh had already taken initiatives for Establishment of Sindh Digital Board, Automation of government operations, Online government services for citizens and business, and Continuous Citizen awareness for opportunities and threats.

Moreover, he said, his government had decided to rely heavily on the use of technology and had planned programmes for technology intervention in focused areas of health, agriculture, education, and women empowerment.

"The Sindh government wants to leapfrog in use of digital technologies and overcome the existing challenges in provision of basic services to citizens", he said.

Federal Minister for IT Syed Amin ul Haq said that IT ministry's Universal Service Fund approved eight new broadband services and fiber optic cable projects having total value of over Rs 10 billion, for providing digital services to over 3.3 million population of all the four provinces.

As many as 31 villages in seven districts of Sindh where facilities were not available or cellular phone or internet signals were very weak, were included in the project. Work on the projects would start from July 1 and would be completed in a short span of 16 months, he said.

Moreover, he said, over Rs 366.40 million were allocated for the improvement of broadband services in specific villages of Thatta Sujawal, Tando Muhammad Khan, Badin, Hyderabad, Umerkot and Tando Allahyar, adding that the IT ministry was spending Rs 14.43 billion on 15 projects in 19 districts of Sindh to provide facilities to more than 14.2 million people in those districts. Most of the projects were in the final stages of completion, he said.

Amin ul Haq said that his ministry was aware of the problems of the industry and believed that issues of IT companies and freelancers needed to be addressed to increase IT exports.

Ease of Doing Business meant removing unnecessary barriers and making things easier, he said, and hoped that if ease of doing business were implemented, the IT exports would reach record levels.

In the 1970s the first IT industry was established in Karachi and today the city was at number three in IT establishments, he said and urged the Sindh chief minister to incentivize the IT industry in the larger interest of the country.

Special Assistant to CM Tanzila Ume Habiba, Chief Secretary Sindh Suhail Rajput, Secretary Sc&IT Asif ikram, Chairman SRB Dr Wasif Ali Memon, and Secretary General PASHA Hira Zainab also attended the seminar.