The Small and Medium Enterprises Development Authority (Smeda) has proposed simplification of tax and labour laws in the SME Policy to be presented before the cabinet for approval next month. Major recommendations include simplification of tax rules, exemption of certain labour laws, establishment of a national SME Chamber of Commerce and Industry and appointment of an independent SME Ombudsman.
This was stated by the Smeda Chief Executive Officer Shahab Khawaja, while making a presentation on SME policy at a workshop, on Wednesday.
The workshop organised to discuss Pakistan's first-ever SME Policy was presided over by the Minister for Industries, Production and Special Initiatives Jahangir Khan Tareen and attended by governor State Bank of Pakistan (SBP) Dr Ishrat Hussain, Chairman CBR M Abdullah Yusuf and others.
SMEs contribution to value addition in manufacturing sector has risen from 27 percent to 35 percent in the recent years, according to a statement distributed among the participants of the workshop.
However, the participants questioned the 'authenticity' of the data on which the policy is framed as most of the figures have been taken from secondary sources.
The concessions being sought by the SME sector in the proposed policy gives an impression that Smeda is advocating the promotion of informal economy, they observed.
SBP governor Dr Ishrat Husain said in his speech that agriculture and SMEs provide 90 percent employment. Therefore, he added, the banking sector will have to fully participate in promotion of SME sector.
Dr Ishrat said this will help the government to reduce poverty in urban and rural areas and create job opportunities. The SBP will support the banks lending for SMEs on cash flow, he said.
The SBP governor, however, said that the SMEs will have to acquire state-of-the-art technologies to avert crises like the one faced by the Sialkot surgical equipment industry whose exports declined due to lack of technological know-how.
SMEs will be at the center of economic policies, Dr Ishrat said and added that but they will have to equip themselves with modern technology and modern techniques of responsibility in auditing, accounting etc.
Abdullah Yusuf said on the occasion that the CBR has already introduced certain innovations in the tax regime for giving relief to the SME sector. All the possible facilities are there for the SMEs, the only thing is the need of corporatising the sector to make it formal, he said.
In his presentation Shahab Khawaja said the proposed policy has also recommended to the government to promulgate SME Act to give legal cover to the policy. He said it was imperative that the policy be approved by the Prime Minister and endorsed by all provincial governments.
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