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Federal Cabinet Approved the Digital Pakistan Policy

Cabinet today approved the Digital Pakistan Policy in its meeting chaired by the Honorable Prime Minister of Pakistan. The Minister for IT and Secretary (IT) presented the high level contours of the policy to the Cabinet.

The vision of the policy is to improve citizens’ quality of life and economic well-being by ensuring availability of accessible, affordable and reliable high quality ICT services. Government strongly believes in mass adoption of emerging digital technologies and innovative applications to enable cross-sector socio-economic development and transformation of economic activities, governance models and achievement of sustainable development goals.

“Digital Pakistan’ Policy will serve as a catalyst towards a holistic Digital ecosystem in the country with advanced concepts and components for the rapid delivery of next generation digital services, applications and content”, the Minister said after the approval of the policy document.

The Minister congratulated and appreciated the 4 years of hard work of IT Ministry team particulary the current and previous Secretaries of Ministry IT, Member-IT, Director IT and his team, for their dedicated efforts towards the finalization of the subject policy. She further thanked the relevant stakeholders, for providing their valuable feedback throughout the process. With the approval of Digital Pakistan policy today by the Cabinet, Pakistan has taken a major leap towards adopting transoformational digitization to accelarate socio economic development.
The visionary fiscal and non fiscal incentives will enable the IT industry to increase software exports, more youth trained and skilled with technology, enterprenures, freelancers, innovation, and digital e/m services. InshaAllah. ”

Prior to its submission to the Cabinet, to ensure the element of inclusiveness, consultations with all relevant stakeholders including various Divisions, public and private organizations, PASHA, civil society, Academia, provincial governments, IT & Telecom industries and Associations related to Persons with Disabilities etc. were carried-out in the form of meetings, workshops and seminars. A formal inter-divisional consultation was also carried out by this Ministry as per the GOP Rules/Regulations.

The Minister further explained that this policy document along with its other initiatives also focus on Youth, Women and girls. This policy has several measures that will ensure equal access to ICTs for women and girls which will help reduce digital divide and support gender equality to promote economic growth of the country.

Ministry of IT and Telecom will play the role of an enabler and facilitator, for digitization, providing necessary guidance where required, while relevant federal ministries, divisions and departments will be taking the lead role for the implementation of policy strategy falling within their domain.

Digital Pakistan Policy also includes a specific chapter for the fiscal and non-fiscal incentives for the IT/ITeS industry which were finalised in consultation with PASHA . Current incentives and promotional initiatives already in place for the sector include 100% foreign ownership allowed, 100% repatriation of capital & dividends (subject to SBP Approval), IT & ITeS Export Income Tax exemption till June 2019 and Income tax holiday for Venture Capital companies/funds till June 2024, under Venture Capital Companies and Funds Management Rules, 2000.

The additional incentives particularly for IT startups were awarded in the budget (FY 2017-18) to promote innovation & entrepreneurship that included but not limited to exemption for a period of three years from Income Tax, Minimum Tax and Withholding Tax for PSEB registered and certified IT startups, exemption from sales tax on export of IT services from Islamabad and other federal territories and IT Companies allowed to open Foreign Exchange Accounts in Pakistan. Furthering the enabling environment for the sector, additional Incentives were announced in the newly approved policy that includes extension of zero-rated tax regime on IT/ITeS exports till 2025, 5% cash reward on IT export remittances, reduction of sales tax to 5% on domestic revenues in Islamabad capital territories (ICT) and legislation for Tech SEZs and new IT Parks. These incentives will attract long term investments, improve export remittances and proliferate new IT parks through technology SEZs throughout the country.

In the end, the Minister directed the MoIT team to devise an appropriate strategy to align the ‘Action Plan’ with key priority areas for proper monitoring, evaluation and its implementation in true letter and spirit.

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