PkRevenue.com – Zulfikar Thaver, President of the Union of Small and Medium Enterprises (UNISAME), has expressed grave concerns over potential new tax burdens in the upcoming 2024-25 budget, warning that additional taxes could severely cripple the already struggling SME sector.
Thaver highlighted that SMEs are currently battling numerous challenges, including rampant inflation, high energy costs, and steep import duties on raw and packing materials. “If the policymakers levy more tax and duties in the forthcoming budget, the sector will be crippled,” he asserted.
UNISAME Chief shared these concerns with Nadia Seth, the General Manager of Policy and Planning at the Small and Medium Enterprises Development Authority (SMEDA). He urged SMEDA to persuade the government to refrain from imposing additional taxes on income or duties on essential materials, stressing that SMEs are in no position to bear further financial burdens.
He further noted that the purchasing power of the salaried class has significantly diminished, leading to reduced sales for SME units. “If the salaried class is taxed further, it will indirectly affect SME units, compelling them to reduce production or even shut down,” UNISAME Chief warned.
Hussain Ali, Convener of Logistics, added that high freight rates, driven by risks of war and violence at sea, have made imports and exports more costly due to longer and diverted routes. This increase in costs renders goods unaffordable and uncompetitive in the market.
Salman Merchant, Convener of E-commerce, pointed out that Pakistani SMEs face stiff competition from neighboring countries, where merchants enjoy better facilities and benefits. Pakistani online sellers, by contrast, often have to route their businesses through Dubai, incurring additional commissions and charges to intermediaries.
Shaukat Ali, Convener of Banking, lamented the lack of currency swap agreements with Iran, a potentially lucrative market for Pakistani SMEs. He also highlighted the fierce competition from smuggled consumer goods in the market, which undercuts legitimate SME operations.
Hassan Ibrahim, Convener of Alternate Energy, criticized the government’s stance on solar energy. He noted that instead of promoting solar power, the government is considering reducing the buy/sell back of electricity to the grid, further complicating operations for SME units.
The UNISAME Council (UC) members collectively emphasized that any new taxes or duty increases in the budget would be detrimental. They advised the government to expand the tax net, curb smuggling, and crack down on tax evaders, profiteers, hoarders, and those who misdeclare values and goods to avoid duties. “These elements are the real bloodsuckers and need to be dealt with an iron hand,” they concluded.
