KARACHI: President Karachi Chamber of Commerce & Industry (KCCI) Muhammad Jawed Bilwani has urged the Sindh government to look into the possibility of reducing the rate of SESSI’s Social Security Contribution by at least 2 percent and freezing the same so that the substantial burden passed on to the industries every year due to hike in minimum wage and the subsequent impact on social security contribution could be minimised to some extent.
“By taking into account the miseries being faced by the poor masses in the ongoing era of inflation, the business community started complying with Sindh Minimum Wage Board’s decision of raising the minimum wage to Rs37,000 from July 1, 2024, but this hike has also impacted SESSI’s social security contribution which is currently being charged at the rate of 6 percent,” he said, adding that the Sindh government must also understand the hardships being faced by the industries due to unbearably high cost of doing business and accordingly announce relief in the form of 2 percent reduction in social security contribution.
He stated that industrialists are currently contributing Rs2,220 per worker each month, which he considered to be too high and unaffordable. Although it may seems like a small amount, it adds up significantly. For instance, if an industrialist has 1,000 workers, their contribution to SESSI would be Rs2.20 million per month and Rs26.64 million per year, which is undoubtedly a substantial amount and difficult for many industries to manage. Some large-scale manufacturing industries even have 5,000 to 7,000 workers, making it extremely challenging for them to cover their expenses such as salaries, social security contributions, and utility bills.
Expressing concerns over the alarming situation faced by many businesses, Jawed Bilwani believed that given the current circumstances, businesses may think of resorting to large-scale layoffs; therefore, the government must realize seriousness of the situation and immediately provide support by reducing social security contributions. “This support would not only provide some sigh of relief to industries but will also be a great service to society as even minor support in the form of reduction in social security contribution could save jobs of thousands of workers and ensure bread and butter for their families”, he added.
Copyright Business Recorder, 2024
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