The tech startup culture is on the rise in Pakistan and a number of different incubators are currently looking after such startups in order to mentor them and provide them with adequate training until they can stand firm on their own feet.
One problem that the tech startups in Pakistan were facing was of the taxes levied on them. However, while announcing the Budget 2017-18, Pakistan’s Finance Minister Ishaq Dar said that tech startup companies in Pakistan would be exempted from paying sales tax, and that this exemption would last for the first three years since the inception of the startup company.
Startup companies are often burdened with taxes that result in high losses suffered by them, which they are usually not ready to sustain in the incubation stage. The sector had been looking out for help from the government for quite some time so that they could flourish in the future without facing heavy losses.
By saving the sales tax, startup companies could now invest this amount on research and development of their products and services, which will earn them considerable benefit in the long run.
For any startup, the first few years are very difficult as they are cash tied and don’t have a lot of funds to play with. Specifically in Pakistan, it is very difficult for startups to gain the trust of investors as the startup culture is not common in the country right now. The startup culture in Pakistan needs many more initiatives like this from the government to give it the boost that it deserves to flourish in this economy.
Ishaq Dar also said that the IT exports from FATA and Gilgit would also be exempted from sales tax. This move from the government was well received by the people from the technology startup sector. Chairman of Punjab Information Technology Board, Dr. Umar Saif said that this was a big win for the startup ecosystem in Pakistan.