ISLAMABAD: A parliamentary subcommittee on Friday proposed it should be made mandatory for software companies to register with the Pakistan Software Export Board (PSEB) in order to monitor IT remittances.

“This will also ensure that IT companies produce quality services in line with international standards implemented through PSEB, said Muttahida Qaumi Movement MNA Syed Ali Raza Abidi during a meeting of the National Assembly Sub-committee on Information Technology which met to discuss the problems faced by the PSEB.

The committee was told that registering with PSEB is currently not compulsory. IT companies in Pakistan are producing gaming and animation software, are developing applications for smart phones and are developing programmes for international clients in the financial, education and health sectors.

MNAs suggest registering IT companies will help monitor remittances, ensure quality services are offered

Members of the committee were informed that IT remittances and exports valued at $560 million in the financial year 2015-16. It is estimated to grow to $650 million in the fiscal year 2016-17, said PSEB Managing Director Asim Shahryar Asim Hussein.

He told the meeting that estimated IT exports valued at $2.3 billion in the financial year 2015-16.

“It is estimated that IT exports will increase to $2.9 billion in 2016-17, Mr Hussein said.

Talking about estimated IT remittances, the official explained that most IT companies in Pakistan, call centres and software developers, were parking their money in banks outside the country. This was to evade excessive government taxes.

The committee’s chairman MNA Farhana Qamar said this is exactly why the registration of IT companies with PSEB was necessary so they can be monitored and so the inflow of foreign exchange is increased.

Mr Hussein told members of the committee that the growth in the Pakistani IT sector and its exports have been the highest in South Asia the last three years and that the industry and its exports have grown by 70pc from June 2013 to June 2016 and 75pc between 2014 and 2017.

“Meanwhile, India’s IT exports have grown by 40.6pc and that of Sri Lanka have grown by 19.9pc during the same time,” He said.

The growth rate of Pakistan’s IT industry in the current year is 16.4pc while that in India is 8pc and in Sri Lanka it is 5pc, he added.

“IT remittances crossed $70.4 million in March this year when in July 2014, IT remittances were $35.6 million, double in less than three years,” he said.

The PSEB MD said only 681 companies were registered with PSEB in 2013 and 1,300 companies are registered in 2017.

“Several IT companies and call centres are reluctant to register with PSEB, thinking registering with the government will only increase paperwork and create a choking environment,” Mr Hussein explained. Members asked about the incentives to offer to companies to make them register before it was made mandatory.

Pakistan is yet to establish its first IT park when there are 53 in India which contribute $150 billion to the IT industry.

In fact, PSEB has run into problems establishing IT parks in Lahore and Karachi and though it had made arrangements with the board, local governments are causing delays in providing land for developing the parks.

Mr Hussein told the meeting that the Koreans, who entered into a partnership with the Pakistani government, will start working on an IT park in Islamabad in 2018 and finish the project by the end of 2020.

Published in Dawn, May 27th, 2017