The Finance Minister of Pakistan, Ishaq Dar, has presented the budget for the fiscal year 2017-2018.
During his budget speech, he has announced a number of facilitations for the IT industry which have been pronounced by the government. He has said that an IT park is being established with the help of South Korea.
The country will be investing a whopping $50 million for the establishment of the IT park in the capital city of Pakistan, Islamabad. The purpose of the IT park will be to uplift the entrepreneurial spirit in the people of the country who have the potential. Also, it will serve to boost the business ties between the two countries involved.
The boom in the smartphone market and to attract the foreign brands, the government has minimized the withholding tax on smartphones from 14 percent. Also, the customs duty on a smartphone will also be reduced to Rs.650 from Rs.1000 per set.
Tax breaks have been announced for the Agriculture, Information Technology, and Small and Medium Businesses in the country. It is anticipated that these tax leverages will help these sectors to contribute more towards the development of the economy of the country.
For the first three years, the technology companies and startups will be exempted from the income tax.
For the smartphones, the import duty has been levied differently on smartphones belonging to distinct categories:
- Feature Phone – Import Duty: Rs.300
- Low-End Smartphone – Import Duty: Rs.650
- High-End Smartphone – Import Duty Rs.1,500
It must be noted here that the import duty on the smartphones was increased from Rs.500 to Rs.1,500 in the past two years and has been reduced only partially. Also, the duties for the other categories remain intact.