KARACHI: President UNISAME Zulfikar Thaver has sent SOS to the Adviser on Commerce Abdul Razzak Dawood stating that finance had become unaffordable, utilities have become costly, logistics expensive and raw material beyond reach of SME textile, rice, sports, surgical, cutlery, leather, carpets, light engineering and foodstuffs units.
[the_ad id=”32940″]“The SME farmers and services providers are also in deep trouble due to the tax axe. The budget has increased taxes and the 17 percent sales tax is beyond comprehension”.
Thaver said the SMEs never expected such harsh treatment and unfriendly policies from a government, which had made promises to uplift the sector on fast track basis. “This is fast track setback,” he said.
UNISAME has urged the government to spare the SME sector and save it from collapsing, as the sector had become uncompetitive due to higher cost of production, high cost of doing business and uncertainty of parity rate.
UNISAME has recommended fixation of dollar rate through injecting sufficient dollars in the market, capping interest rates at current levels, export refinance to SMEs and sales tax exemption to those SME units exporting 90% of their production.
“SME policy will be a futile exercise if the basic needs of finance, energy, availability of raw material, logistics and tax incentives are not provided,” Thaver said.
Criticizing the new SME policy, Thaver said the new policy aimed to narrow the turnover parameter from the present Rs800 million to Rs650 million for a concern to be classified as SME. “This will be a grav mistake as the medium sector is the most vibrant sector and any exclusion of the upper medium sector from the definition would prove detrimental”.
In fact the turnover parameter needs to be increased to Rs1 billion as recommended by State Bank of Pakistan (SBP), to enable the upper medium sector to come forward and modernize their units and joint the mainstream.