Small and Medium Enterprises Development Authority (Smeda) has proposed that subsidy out of export development fund (EDF) to the extent of 75 percent for setting up of costly waste water treatment plants in individual tanneries/factories in Karachi and some cities of Punjab be provided. This has been demanded in an exercise conducted by the Smeda, like previous years, to prepare budget recommendations for 2005-2006 with a particular focus on small & medium enterprises (SMEs) operating in vital sectors, making a considerable contribution to country's GDP and export earnings.
For the compilation of proposals, meetings were held with all the stakeholders. According to sources in Smeda, for the leather sector it has been proposed that loan on 6-percent mark-up announced in the last trade policy for installation of wastewater treatment plants may be reviewed.
European Union may be requested to abolish import duty on finished leather being exported from Pakistan, as there is no import duty in Pakistan on such imports from these countries. Raw and wet blue hides must be exempted from levy of 1-percent surcharge at import stage as it increases the cost of production.
Import of crust leather or semi-finished leather from India be allowed. About 25-percent freight subsidy on air and sea shipments should be allowed to exporters of leather products as already allowed to leather garment exporters.
For gems and jewellery sector, Smeda has proposed incentives for this sector by reducing the taxes/duties to zero-percent for upgrading the quality of products. It is recommended by the industry that all imports against exports must be exempted from all types of taxes, duties, cess, fee and surcharge.
In horticulture, the Smeda has called for extending special packages for drought stricken areas in Balochistan, support/incentives for introduction of micro-irrigation system, provision of soft loans through ADB for crop preparation and rehabilitation of flood affected areas.
While for marble, granite & mineral sector, it is proposed that customs duty and sales tax on machinery, parts, attachments, accessories and consumables must be removed.
Discussing the hotel sector, the Smeda said that even though hotels have been declared as an industry in the tourism policy, the policy recommendations have not been implemented for the last 15 years. Hotel industry is suffering heavy losses due to its non-implementation, as the hotels are unable to avail of tax relief, concessions etc, available to other industries.
It is recommended that hotels be allowed to treat foreign currency receipts from abroad as exports. Input sales tax adjustment of owning company should be allowed against their hotels' sales tax liability.