How to Phenomenal Decline of Computer Industry in Pakistan

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Phenomenal Decline of Computer Industry in Pakistan "The reports and data available suggest that the introduction of the 15% Sale Tax in the financial year 2006-07 increased the price of computers which increased the cost of doing business. The average price of PC reported by local assemblers and retailers increased up to 20%. This is one of the factors which have negatively impacted the growth of the IT sector as evident by export figures for the first six months of the financial year 2007-08. " By Munawar Iqbal Computer industry has assumed unprecedented importance in the global economic arena and it is regarded as the fourth pillar of economy. In Pakistan, the Private sector is contributing as the main driver for growth in this industry from last so many years. It's a fact that the importance of the industry has always been acknowledged at official level and the government(s) has also express a strong resolve to take steps for the promotion of the industry but the ground realities are depicting the picture otherwise. One of the harsh ground realities is that the Personal Computer density in Pakistan is 1.5, which compares unfavorably with other countries of Asia-Pacific Region. We often talk about how to compete with these countries and what need to be done to enhance computer-density-density as the computer density co-relates to several other parameters of development it is necessary that steps be taken to improve the PC penetration and thereby bridge the digital divide. A recent report is quite alarming in regard with Pakistan's PC/Server market as it shows that the market has experienced a slowdown in 2007 with its annual growth rate declining to 9.6% from the 16.4% recorded during the previous year. The latest data in this regard released by Springboard Research, a leading innovator in the IT market industry says that Pakistan registered 629,836 unit shipments of PCs and servers in 2007. For the last reported period, Q4 2007, the market grew 11% YTY with 148,613 PC and server unit shipments. While we make comparison with the growth of IT and computer industry in the other countries of the region, a serious question arises that why we are not at par with them when the private sector is striving hard to promote this vital sector of the economy and government has also declared the promotion of the sector as one of its top most priority. To answer this question we need to have a comparative look at the state of affairs and the actual role and incentives provided by concerned governments to their IT industry. Turkey has exempted its Computer industry from GST, import duty and corporate income tax while allowed personal income tax for 10 years. Vietnam has given the industry exemption of GST and import duty besides 4 years exemption of corporate income tax and relaxation in personal income tax ranging from 3 to 35 per cent. Thailand and Malaysia have also offered similar sort of incentives to their ind