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Government Plans Tax Exemptions for Startups in Next Fiscal Year

The federal government is considering implementing tax exemptions for local startups in the upcoming fiscal year. If approved, these exemptions will benefit sectors such as health technology, artificial intelligence, financial technology, and agriculture technology, according to a report by Dawn on Wednesday.

This proposal was discussed in a meeting chaired by Prime Minister Shehbaz Sharif on Tuesday. IT Minister Shaza Fatima Khawaja highlighted the current tax disparity between private individuals, who enjoy zero tax, and those working with organizations, who face a 35 percent tax rate. She suggested tax exemptions as a way to address this imbalance and support startups.

PM Shehbaz instructed the central bank governor to ensure that banks do not create obstacles for software exporters, particularly regarding debit cards and foreign currency issues. He also emphasized the importance of consulting with the private sector to foster a supportive environment for startups.

The government has set an ambitious target of achieving $25 billion in IT exports by 2029, with plans to expand tech services and captive IT businesses. The meeting also discussed the Pakistan Digital Nation project, which aims to digitize state affairs and the economy. As part of this initiative, approximately 1.5 million individuals are to be trained in the IT sector over the next five years.

Further plans include ensuring international certifications for IT professionals through public-private partnerships, establishing three IT parks, and setting up 250 e-Rozgar centers. Additionally, the government aims to enhance mobile broadband coverage to 100MBPS and increase fiber penetration to 12 percent.

Prime Minister Shehbaz Sharif emphasized the significant potential of the IT sector in Pakistan and the vital role of entrepreneurs in driving its growth.

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