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SMEDA sends proposals for Federal Budget 2019-20

Lahore, April 08, 2019 (PPI-OT): The Small and Medium Enterprises Development Authority (SMEDA) has sent a set of proposals for Federal Budget 2019-20, which demands that SMEs being an important sector of our economy require assistance and support to ensure their sustained growth. The budget proposals compiled by SMEDA through extensive consultation with stakeholders of SME sector across the country recommend that with the renewed commitment of the Government of Pakistan to promote SME-Led Economic Growth in the country, it is vital to include fiscal measures in Federal Budget 2019-20 to facilitate business environment for SME development.

The document based on SMEDA proposals for national budget 2019-20 has been sent to the Ministry of Finance, Federal Board of Revenue and Ministry of Industries and Production to seek special attention for SMEs in the upcoming budget. The Budget recommendations include simplification of tax procedures/ documentation, reduction in number and frequency of taxes for SMEs and reduction in corporate tax for small companies from 24% to 20%. Furthermore, it has been proposed that start-ups may be provided tax holiday for the first five years.

These businesses may be allowed to avail capital allowances and to carry forward losses from the early years. Reduction in withholding tax on import of raw material by all categories of importers, whether commercial or industrial has been proposed to abolish the difference of rate between industrial and commercial importers. In addition, it has been proposed that a uniform sales tax rate may be applied on all services delivered by SMEs operating across Pakistan to eliminate double taxation at federal and provincial levels and disparity among provinces.

In order to enhance SMEs share in total exports, Special Economic Zones (SEZs) be developed for technology intensive products (engineering, chemicals, value added textile and pharmaceutical) to encourage production of high value addition and technology intensive products for exports. Simplification of process of applying for DTRE (Duty Drawback and Tax Remission) Scheme and its extension across the entire business values chain has also been recommended.

In order to increase SMEs access to credit, it has been proposed that the government may take steps to introduce financial schemes for new startups and women entrepreneurs. This includes; venture capital firms and angel investment programs, special financial schemes at reduced interest rate for SME sectors against their performance in terms of exports and lending schemes for WEs for purchase of machinery. Various other proposals related to tariff and customs, infrastructure and skill development have also been made a part of the proposals and recommendations for Federal Budget 2019-20.

For more information, contact:
DGM (Admin. and PR)
Small and Medium Enterprises Development Authority (SMEDA)
4th Floor, Building No.3, Aiwan-e-Iqbal Complex,
Egerton Road, Lahore, Pakistan
Tel: +92-42-111-111-456
Fax: +92-42-36304926-7
Email: aligohar@smeda.org.pk, helpdesk@smeda.org.pk
Website: www.smeda.org.pk