Goods-Related Businesses Are Posing as IT Companies to Avoid Taxes: Senator

In a recent meeting of the Senate Standing Committee on Information Technology, Senator Anusha Rahman raised concerns about certain companies posing as IT firms while actually engaging in goods-related businesses. She highlighted that these companies are obtaining tax exemptions under the guise of providing services. Senator noted that while many IT companies have been reporting losses over the past six to eight months, these particular companies are still turning a profit. When the Federal Board of Revenue (FBR) requested details about these companies, it revealed that 3,200 firms were operating under this pretense. Out of these, only eight companies are registered with the Pakistan Software Houses Association (P@SHA). She further stated that there was a loss of $300 million in January and February, warning that if this trend continues, it could lead to significant damage to the country’s economy. Senator Anusha Rahman noted that P@SHA had chosen not to bring this issue to the government’s attention due to concerns that it could result in the withdrawal of tax exemptions. The Ministry of IT was urged to verify the accuracy of these claims. In response, Federal Minister Shaza Fatima Khawaja noted that the FBR’s system has become automated, making it difficult to address these issues. She added that, following the Prime Minister’s directives, the customs system has also been improved. Senator Anusha Rahman pointed out that there was no customs fee system in place during January and February, suggesting that the assumption that all these companies are IT firms is incorrect. Minister Khawaja acknowledged that not all IT companies are registered with P@SHA, emphasizing that P@SHA itself is an association that can be influenced by internal politics. Minister Khawaja questioned the logic behind the notion that if one company is incurring losses, another should be making profits. She highlighted that internet usage has increased by 25% over the past year, with IT growth rising by 27%. She assured that there have been no issues with fixed-line internet services. The Prime Minister has instructed the FBR and the State Bank to ensure that IT companies are not harassed. The committee has requested complete details of these companies for discussion in the next meeting.