The State Bank of Pakistan (SBP) has announced an extension to the mandatory retention of 35 percent of export proceeds for IT companies and freelancers. This initiative, aimed at facilitating the IT sector, allows exporters to retain some of their earnings in special foreign currency accounts. The SBP’s decision to extend this facility until 30th June 2024 aims to boost IT exporters and freelancers, ensuring continued support and financial flexibility.
Facilitating IT Exporters and Freelancers and Companies
To support the IT sector’s growth and development, the SBP introduced amendments to foreign exchange regulations on 13th January 2023. Under these regulations, IT exporters and companies were permitted to retain 35 percent of their export proceeds in special foreign currency accounts. The banks were directed to credit these earnings into exporters’ designated accounts. To be eligible for this facility, exporters must be registered with either the Pakistan Software Export Board (PSEB) or the Pakistan Software Houses Association (P@SHA) and engage in the export of software, IT services, or IT-enabled services (ITeS).
Extension of the Facility
Initially, this facility was set to expire on 31st March 2023. However, recognizing the significance of this initiative and its positive impact on the IT sector, the SBP has decided to extend the validity of these instructions until 30th June 2024. This extension provides exporters and freelancers an extended period to benefit from the mandatory retention of export proceeds. By retaining a portion of their earnings, IT companies and freelancers can better manage their finances, invest in growth opportunities, and contribute to expanding Pakistan’s IT industry.
This initiative, which allows exporters to retain 35 percent of their earnings in special foreign currency accounts, provides financial flexibility and stability to IT companies and freelancers. SBP ensures that the IT industry can continue to thrive, attract investments, and contribute to Pakistan’s economic progress. With this extended support, IT exporters and freelancers can leverage their retained earnings to enhance their competitiveness and establish Pakistan as a prominent player in the global IT market.
Also read: Government Assures Full Support to IT Industry to Boost Exports
