’Budget should facilitate small traders’

KARACHI: Union of Small and Medium Enterprises (UNISAME) has submitted road map to the prime minister (PM) Nawaz Sharif and urged him to ensure that the budget making committee does not over look the crucial requirements of the majority sector which is the engine of growth and the backbone of the economy.

President UNISAME Zulfikar Thaver said UNISAME is a sponsored forum entrusted with the task to create awareness of the rights of the SMEs to identify impediments in SME growth to recommend remedies and help the government in policy making. UNISAME has given road map to the policy makers for uplift of the sector on fast track basis.

He said the budget should aim at facilitating micro, small to medium sized sector by providing them finance at affordable mark up from commercial banks and financial institutions according to their needs. The government must strengthen the banks, financial institutions, leasing, insurance and joint venture companies as these are the pillars of the economy. The SME Bank must be enabled to cater to the financial requirements of the sector.

He pointed out that SMEs need finance to modernize their units, some need bridge finance others need leasing facilities and the new entrants who are educated and have innovative ideas need venture capitalist as partners.

The commercial banks must have arrangements and be in a position to also arrange for mortgage financing under conventional or Islamic banking systems. The commercial banks must have affiliations with leading collateral management companies and be able to arrange warehouse receipt financing for its clients by arranging a triparte agreement between the borrower, the bank and the collateral management company.

The commercial banks must have expertise in resolving the financial needs of SMEs by enabling them to obtain finance on best possible terms promptly. The micro finance banks must be allowed to finance the micro enterprises up to Rs 1 million and all caps must be removed.

The income tax exemption limit of Rs 400000 be increased to Rs 600000. The with holding tax applicable on cash withdrawals of Rs 50000 must be enhanced to Rs 100000. With holding tax on profits on savings and bank deposits be reduced to 5%.

The income tax on family businesses or Association of Persons (AOP) be rationalized and also the income tax rate must be reduced and tax net be broadened. The income tax on agricultural be imposed and tax and duties on farm inputs be exempted.

The SME Policy 2007 must be implemented and the promises made in the policy must be fulfilled. The SME Fund, the SME Export House, Technical Institute, Ombudsman, Joint Venture Fund and the SME Chamber of Commerce have not been established although the policy was passed in the national assembly and approved by the cabinet.

The post ’Budget should facilitate small traders’ appeared first on Pakistan Press International.