Federal cabinet approves first ever Digital Pakistan policy

ISLAMABAD: The federal cabinet on Wednesday in its meeting chaired by Prime Minister Shahid Khaqan Abbasi approved the first-ever ‘Digital Pakistan policy‘ presented by Minister for IT Anusha Rahman.

The policy envisions to improve quality of life and economic well-being by ensuring availability of accessible, affordable and reliable high quality ICT services by the mass adoption of emerging digital technologies and innovative applications to enable cross-sector socio-economic development, 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 federal minister appreciated the four years of hard work of the IT Ministry team for their dedicated efforts towards the finalisation of the policy. She further thanked relevant stakeholders for providing their valuable feedback throughout the process.

With the approval of Digital Pakistan policy, Pakistan has taken a major leap towards adopting trans-formational digitization to accelerate socio-economic development. This will enable the IT industry to increase software exports, more youth trained and skilled with technology, entrepreneurs, freelancers, innovation and digital services.

Prior to submission to the cabinet, consultations were held with several stakeholders including various divisions, public and private organisations, Pakistan Software Houses Association (PASHA), civil society, academia, provincial governments, IT and Telecom industries and associations in the form of meetings, workshops and seminars to ensure inclusiveness.

The minister further explained that this policy document along with other initiatives also focus on youth, women and girls. There are 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.

Ministry of IT and Telecom will facilitate digitization providing necessary guidance where required, while relevant federal ministries, divisions and departments implement policy strategy within their domain.

Digital Pakistan Policy also includes a specific chapter for the fiscal and non-fiscal incentives for the IT industry which were finalised in consultation with PASHA. The current incentives already provided include 100% foreign ownership, 100% repatriation of capital and dividends subject to State Bank’s approval, IT export income tax exemption till June 2019,  and income tax holiday for venture capital companies and funds till June 2024.

The additional incentives particularly for IT startups were provided in the budget FY 2017-18 to promote innovation and entrepreneurship that included exemption for a period of three years from income tax, minimum tax IT startups registered with Pakistan Software Export Board (PSEB), exemption from sales tax on export of IT services from Islamabad and other federal territories, and IT companies allowed to open foreign exchange accounts.

The additional incentives announced in the newly-approved policy includes extension of zero-rated tax regime on IT exports till 2025, 5% cash reward on IT export remittances, reduction of sales tax to 5% on domestic revenues in Islamabad, and legislation for Tech Special Economic Zones and new IT Parks.

These incentives will attract long term investments, improve export remittances and proliferate new IT parks throughout the country. The federal minister directed to devise an appropriate strategy to align the ‘Action Plan’ with key priority areas for proper monitoring, evaluation and implementation.