26 December 2013

E-Commerce in Pakistan

The Pakistan Software Export Board (PSEB) has a number of programs to activate the local IT sector.

  • IT companies qualify for an income tax exemption on software-export revenues until June 30th 2016
  • Software exporters may retain 35% of their earnings in foreign exchange accounts.
  • Computers and related hardware are exempt from customs duties, though the 2006/07 budget subjected them to a 15% sales tax.
  • Depreciation on computer equipment was raised to 30% (from 10%) in the 2001/02 budget.
  • Financing options provided by banks and development finance institutions for IT-sector contracts are acceptable as collateral for the export-finance facility.
  • Accreditation and Quality Testing Councils are being set up to ensure a high standard of IT education in the public and private sector.
E-commerce: Foreign Investment

Foreign investment of 100% is permitted in the telecommunications sector. About 100 IT and telecom companies from the United States, Europe and Japan have offices in Pakistan, including Oracle, Cisco Systems, International Business Machines, Microsoft and Intel. Two leading ISPs have foreign connections: Worldtel is an affiliate of Worldtel Canada and NetSol Technologies of the US and the Akhter group of the UK own NetSol Connect.

Foreign investors are allowed to invest up to 100% in software companies, and foreign interest in Pakistan’s technology sector has been increasing. Local entrepreneurs have set up around 100 call centers in recent years in Pakistan; one of the first was a call-centre that Align Technologies (US) set up in 2000.

The United Nations Industrial Development Organization and the World Bank also support projects for Information-technology development.

E-commerce: Intellectual Property

There was a flurry of legislative activity concerning protection of intellectual property in 2000/01.  The Pakistan Patent Ordinance 2000 was issued in December 2000 and the Trademarks Ordinance 2001 was issued in April 2001, and they can be applied to Internet activity.

According to an August 2006 report from the government, the Electronic Data Protection Act 2005, the revised Electronic Crimes Act 2004 and a law relating to electronic payments had been drafted and were ready for legislation, although there is no schedule to present them. The Electronic Data Protection Act would provide protection and safety to foreign data regarding the processing of such data in Pakistan; details for the other two acts were not yet available by August 2006.

E-commerce: Compliance and enforcement issue

The president passed the Electronic Transactions and Government Ordinance in September 2002. It provides for the legal recognition of electronic documents and specifies offences. The ordinance makes it an offence for a person to gain or attempt to gain unauthorized access to any information system with or without intent to acquire the information contained therein, whether or not he/she is aware of the nature or contents of such information. It also makes it an offence for any person to do or attempt to do any act with intent to alter, modify, delete, remove, generate, transmit or store any information through or in any information system, knowing that he/she is not authorized to do any of the foregoing. Both offences are punishable with either a prison term of up to seven years, or a fine up to PRs 1m or both.

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