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Technology Sector
Technology plays a critical role in the evolving knowledge economy by establishing itself as a powerful instrument for fostering economic development. It enables innovations in different sectors of the economy, such as agriculture, manufacturing, services, education, health, and government, by increasing productivity, efficiency, and competitiveness and hence economic growth.
IT and ITes:
19,000
IT and ITeS companies
5,109
IT and ITeS companies registered as IT exporters
2.37M
Active freelancers
35.1%
Export of IT services
32
Software technology parks across the country
20,000
More than 20,000 IT graduates and engineers are being produced each year
$1.6BM
Pakistan’s freelance economy is expected to increase over 4 times by 2023
178%
Over the past 5 years, a phenomenal upward growth in IT and ITeS export at compound annual growth rate (CAGR) of 30 percent
54.54%
Pakistan's IT and ITeS industry serves 170+ countries/territories, with the USA as the leading market in the export landscape.
Numerous Incubation centers for various stage startups
More than 20,000 IT graduates and engineers are being produced each year
Numerous Incubation centers for various stage startups
More than 20,000 IT graduates and engineers are being produced each year
SIZE OF THE INDUSTRY
Incentives for IT sector
Reduced Income Tax (0.25%)
PSEB registered companies to pay only 0.25 percent tax on export proceeds of IT and ITeS
100% tax credit for IT startups
PSEB registered startups are allowed 100 percent tax credit including minimum, alternate corporate tax and final taxes for three years
venture capital funds till June 2025
100 percent equity ownership allowed to foreign investors, 100 percent repatriation of capital and dividends allowed, and tax holiday
Telecom parameters
Pakistan’s journey towards high-speed mobile broadband services accelerated in 2014, when the country conducted a spectrum auction for NGMS and initiated the deployment of 3G and 4G infrastructure in the country for the first time. In the past 10 years the telecom sector has grown by leaps and bounds and the broadband penetration now stands at 54.97%, a bulk of which is through mobiles services.
- 190 M Mobile Cellular Subscriber
- 129 M Mobile Broadband Subscriber
- 3 M Fixed Telephone Subscriber
- 132 M Broadband Subscriber
Mobile Banking
Since the introduction of 3G/4G technology, the country has seen a number of auxiliary services like mobile banking, branchless banking, digital payment infrastructure and other digital financial services develop and grow in the country.
Mobile Manufacturing and Assembly
Pakistan's mobile phone manufacturing industry has grown significantly in recent years as local manufacturing plants produced 10.87 million handsets in the first eight months of 2023.The locally manufactured/assembled 10.87 million mobile handsets included 7.62 million 2G and 3.04 million smartphones.
Government’s mobile device manufacturing (MDM) policy has attracted at least 36 companies to manufacture/assemble smartphones under the policies introduced by the government in 2020.
Incentives for Mobile Device Manufacturers:
Custom duty exemption on Import of Capital goods for Mobile Manufacturing.
Customs duty exemption on import of mobile phones in CKD/SKD form.
Exemption of VAT on import of mobile Phones.
Locally assembled /manufactured phones are exempted from withholding tax on domestic sales.
Advance tax on specific mobile phones in CKD/SKD form is exempt.
Low rate of Sales tax on CKD/SKD condition mobile phones.
R&D allowance of 3% to be given to local manufacturers for exports of mobile phones.