Information technology agreement (2015)

This paper presents a Pakistani case of accession to the WTO Information Technology Agreement which obliges the signatories to withdraw any import duties and taxes on a list of IT and telecom equipment. Some of the products under the coverage of ITA are: computer hardware and software, telephones, semiconductors, measuring, testing and analysing instruments etc.

IT is a growing industry in Pakistan. Government is continuously allocating resources to enhance the proliferation of e-governance and e-commerce systems in the economy. Mobile application industry is driving up, educational institutions have also begun offering short courses and diplomas in application and software development. Law enforcement agencies, civil administrations and educational institutions are gradually enhancing the usage of information technology but the road ahead is not without major diversions and collisions.

Although the Information Technology is bringing efficiency and transparency among its hosting sectors, but its contributions in terms of value addition to the overall economy seems insignificant when compared with many other Asian countries. Pakistan’s share of global IT sales is $2.8 billion out of which $1.6 billion is attributed to IT services and software exports. On the other hand the per year software exports of India are $100 billion. Similarly, the amount ($2.8 billion) is a tiny percentage of the global market of expected $3.2 trillion in 2015. One of the major reasons behind this  trend is the higher taxes and import duties on IT sector and it places Pakistan amongst those 5 countries which has highest import taxes on IT products. In 2013, custom duty on IT products was amounted to Rs. 3 billion and Rs. 5.7 billion was attributed to income tax on these items.