The Information Technology (IT) sector in Pakistan has been incurring losses of over $1 million per hour due to repeated internet shutdowns, according to Sajjad Mustafa Syed, Chairman of the Pakistan Software Houses Association (P@SHA). Speaking to the media on Tuesday, Syed highlighted the severe impact of these disruptions on the country’s IT industry and its export potential.
Syed emphasized that achieving the government’s ambitious target of $15 billion in IT exports requires stable infrastructure, market access, an accommodative taxation policy, and a skilled workforce. He pointed out that every dollar invested in market access yields a return of $49, as evidenced by the sector’s performance over the past three years.
The IT industry has grown by approximately 40 percent, with exports reaching $3.2 billion. Currently, 55 percent of Pakistan’s IT exports are directed to the United States, followed by 20 percent to Europe. However, Syed stressed the need for government investment in branding to unlock the sector’s full potential.
Discussing the consequences of internet shutdowns, Syed revealed that 99 percent of IT firms reported service disruptions, while 90 percent experienced financial losses. He cited a recent example where a call center faced a $2 million penalty due to an internet outage.
On the issue of taxation, Syed criticized the current policy of taxing the sector’s revenue, which he said hampers growth. He urged the government to introduce tax incentives to encourage the sector’s expansion, attract investment, and boost remittances.
Syed also raised concerns about data security, noting that free virtual private networks (VPNs) pose significant risks. He recommended that the government adopt a secure and industry-friendly VPN service provider model. Additionally, he highlighted P@SHA’s role in policy harmonization, emphasizing the need for collaborative efforts rather than isolated policymaking.
The chairman’s remarks underscore the urgent need for government action to address the challenges facing Pakistan’s IT sector, which has the potential to become a major driver of economic growth and exports.
