NKATI Fears Mass SME Closure Over Budget Adversities

NKATI Fears Mass SME Closure Over Budget Adversities

Karachi, July 10, 2024 – The North Karachi Association of Trade & Industry (NKATI) voiced deep concerns on Wednesday over the potential mass closure of small and medium enterprises (SMEs), attributing the grim outlook to the adverse impacts of the 2024-25 budget.

In a strongly-worded statement, Faisal Moiz Khan, President of NKATI, called upon Prime Minister Shahbaz Sharif, Finance Minister Muhammad Aurangzeb, and Commerce Minister Jam Kamal to urgently intervene and shield SMEs from what he described as the looming threat of shutdowns. NKATI Chief stressed the critical need for immediate measures to alleviate the tax burdens imposed by the latest budget, warning that failure to act swiftly could lead to widespread closures across various SME sectors.

Expressing disappointment with the budget’s orientation, NKATI president emphasized that the industrial community had anticipated measures aimed at fostering economic growth rather than strict compliance with directives from international financial bodies like the IMF. He underscored grave concerns that the imposition of heavy taxes, particularly targeting SMEs, could severely hamper business activities, exacerbating the prevailing economic challenges.

“The government must acknowledge that operational industries are not only sources of revenue but also significant contributors to employment,” NKATI President asserted, highlighting the indispensable role SMEs play in bolstering the national economy. He raised doubts about the feasibility of tax collection efforts if industries are compelled to shutter their operations due to financial strain.

Appealing for immediate remedial action, Faisal Moiz urged the authorities to consider substantial reductions in taxes and to lower electricity and gas tariffs to alleviate production costs. NKATI Chief cautioned that without these adjustments, SMEs would inevitably face closure, resulting in substantial revenue losses and escalating unemployment levels. Khan underscored that revising tax policies is imperative to sustain industrial operations and steer the country clear of impending economic turmoil.

The NKATI’s apprehensions reflect broader anxieties within the business community regarding the economic implications of the budgetary measures introduced for the fiscal year 2024-25. The association’s plea for government intervention underscores the urgency of addressing sector-specific challenges to safeguard jobs and economic stability.

As Pakistan navigates through intricate economic landscapes, the resilience of its SME sector remains pivotal in fostering sustainable growth and resilience. The response of policymakers to the concerns raised by industry stakeholders will likely shape the trajectory of economic recovery efforts in the coming months. Observers anticipate heightened dialogue between the government and business leaders to devise actionable strategies aimed at mitigating the adverse impacts of fiscal policies on SMEs and fostering an environment conducive to entrepreneurial growth.