The Small and Medium Enterprises Alliance (SAMEA) on Friday put forward its budget proposals for 2017-18 in which it has requested the government to reduce sales tax rates and also ease collateral condition on bank loans.
SAMEA President Zafar Iqbal stated that Pakistan despite having a lower per- capita income was being subjected to higher sales tax (17pc) whereas, in a developed country like the US where the per-capita income was much higher, the rate was between four to eight pc only.
Mr Iqbal also mentioned that the small and medium enterprises (SMEs) were the backbone of the economy and therefore they should be provided with maximum facilities. He believed that the stipulations laid down for seeking Rs3m loans were very stringent and couldn’t be met by SMEs. He said the condition of collateral against bank loans given to SMEs should be removed and documentation should be minimised because these enterprises are mostly run by individuals or by small groups or a family.
He also put forward the suggestion to the government to put an end to withholding tax on cash withdrawal by registered taxpayers and double the threshold for non-registered persons of cash withdrawal to Rs100,000 a day. Likewise, it is also important to remove discretionary powers of tax officers as it has often led to corruption and hurt the economy.
SAMEA president also advised the government to be careful that the inflow of foreign exchange into the country wasn’t disturbed by increasing restrictions being imposed by Western countries for money laundering.
