Rs. 39.67 Million Revenue Loss Linked to Lapsed IT Company Registrations, Audit Reports

The non-renewal of registrations for thousands of IT companies has resulted in a substantial revenue loss of Rs. 39.67 million for the Pakistan Software Export Board (PSEB), as identified by the Auditor General of Pakistan. The PSEB is alleged to have caused a substantial financial deficit by failing to renew the memberships of 3,967 of the 7,574 registered IT businesses, according to the audit report.

PSEB’s registration regulation requires freelancers, contact centers, and IT enterprises to renew their registrations every one to five years, according to the audit report. The yearly revenue-based renewal costs range from Rs. 10,000 for organizations with annual revenues under Rs. 50 million to Rs. 30,000 for those with sales above Rs. 600 million. The lack of renewals despite this explicit policy is a lost chance to guarantee a vital source of income.

The audit found that to guarantee compliance with registered enterprises, PSEB management lacked a strong marketing plan and an efficient renewal program. Many businesses remained unregistered beyond their original validity period, which was made worse by the lack of prompt monitoring systems. According to audit results, the income loss may have been avoided with preemptive steps.

The audit report states that the issue was brought up with PSEB management, but they did not respond. At the time the report was completed, the minutes of a January 23, 2024, Departmental Accounts Committee (DAC) meeting that addressed the matter were still pending.

The audit recommends a thorough classification of IT firms, contact centres, and independent contractors according to their renewal statuses as well as an investigation into the causes of the registration failures. To recoup lost money and guarantee future compliance, the research also highlights how vital it is to calculate renewal prices for each category.