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Federal Budget Proposals Call for SME Support
The Federal B Area Association of Trade and Industry (FBATI) has outlined several key demands in their budget proposals sent to the finance ministry. The association’s president, Sheikh Tehseen, is advocating for a separate tax system tailored specifically for Small Medium Enterprises (SMEs) and large industrial units.
Taxation for SMEs should be based on reasonable profit and turnover thresholds, while a distinct structure applies to larger enterprises. To facilitate rapid development of these businesses, the FBATI proposes easy, low-markup financing schemes. This includes interest-free or low-interest loans for machinery upgrades, automation, digitalization, and energy-efficient equipment purchases.
Reducing electricity tariffs in the industrial sector is another critical demand, particularly for SMEs. The proposals suggest significant cuts to fixed charges, peak-hour charges, and other surcharges. Ensuring uninterrupted supply of electricity and gas is also crucial to prevent production costs from rising and orders from being delayed.
SMEs should be exempted from complex withholding tax obligations or have these procedures greatly simplified. Timely payment of sales tax refunds and government dues is necessary to alleviate working capital pressure. Additionally, special funds for infrastructure in industrial areas are recommended, including roads, drainage, security, and utilities. The FBATI also suggests providing new SMEs and startup manufacturing units with special tax incentives during their first three to five years to boost employment and investment.