Pakistan’s information technology (IT) sector suffers losses exceeding $1 million per hour due to frequent internet shutdowns, according to Sajjad Mustafa Syed, chairman of the Pakistan Software Houses Association (P@SHA).
Speaking to media, Syed highlighted the critical need for infrastructure stability and market access to achieve the government’s IT export target.
“To achieve the government’s envisaged target of $15 billion IT exports is linked with market access, infrastructure stability, accommodative taxation policy as well as skilled human resources” he emphasized.
Syed also revealed that each dollar invested in market access yields $49 in returns, based on data from the past three years.With IT exports growing by 40%, the sector currently generates $3.2 billion, of which 55% is directed to the United States and 20% to Europe. Despite this progress, internet shutdowns severely disrupt operations.
Syed noted that 99% of IT firms report service interruptions, with 90% experiencing financial losses. He cited a call center that incurred a $2 million penalty due to a recent outage.
P@SHA Chairman further stressed the importance of government efforts in branding and warned against reliance on free Virtual Private Networks (VPNs), which pose data security risks. He recommended adopting secure, industry-friendly VPN models, pointing out that under the Prevention of Electronic Crimes Act (PECA), VPNs cannot be banned as they are tools rather than content.
Pakistan Telecommunication Authority (PTA) that VPN usage would be restricted in the future to curb access to pornographic content. PTA has announced a portal for the registration of commercial VPNs used by companies and businesses and recently granted an extension in the VPN registration deadline.
VPNs are widely used around the world to access content that may be inaccessible or blocked for internet users in their home country. The use of VPNs surged in Pakistan particularly after access to X was restricted since February.
Pakistan has been facing sporadic Internet shutdowns in all major cities in the last few months.
Call for tax reforms to boost investment
The P@SHA Chairman also criticized revenue-based taxation, which hampers growth and discourages investment. He called for tax incentives to attract remittances and reduce the risk of companies relocating abroad. Syed lamented that the IT sector is not officially recognized as an industry, leading to higher input costs and tariffs.
On the workforce, he noted that only 5,000–6,000 out of 35,000 annual IT graduates find employment due to a skills mismatch. To address this, the government plans to launch an Rs8 billion project to develop industry-relevant skills, which Syed believes could drive positive outcomes.
He concluded by stressing P@SHA’s role in policy harmonization, urging the government to create a supportive environment for sustainable sector growth.