ISLAMABAD: The government has approved a comprehensive Small and Medium Enterprises (SME) Policy to strengthen the country’s industrial and manufacturing base.
Minister for Industries and Production Khusro Bakhtiar said this while sharing details of the SME Policy at a press conference along with Minister for Information and Broadcasting Fawad Chaudhry on Wednesday.
Bakhtiar said the policy is aimed at extending facilitation and incentives to promote the growth of the SMEs. Under the policy, the requirement of no-objection certificate (NOC) for the establishment or expansion of certain industries has been done away with.
The minister said that the NOC condition for the low-risk businesses including the services sector,wholesale transport has been abolished whereas the medium risk businesses such as light engineering, leather, auto parts, sports goods and cutlery can get their approval within 30 days after applying for the same. However, he added, SMEs working in explosives, fires, boilers and chemicals have been put in the high-risk category.
Bakhtiar said that under the SME policy, ‘Aasan Finance Scheme’ is being introduced to ensure access of capital to the industries. He said loans up to Rs10 million will be provided without any collateral for the establishment of thirty thousand new businesses. He said a land of 4,200 acres has been allocated which will be provided to the entrepreneurs on easy instalments.
The minister said that another initiative taken under the scheme included streamlining of taxes for SMEs. Under the policy, turnover tax of 1.25 percent has been reduced to 0.25 percent for the business having turnover less than Rs100 million and 0.5 percent for those having turn over from Rs100 million to Rs250 million
However, if anyone is not interested in turnover tax and wants to claim withholding tax then he/she would have to opt for income tax mode, which would be 7.5 percent for businesses with turnover less than Rs1 million and 15 percent for those having turned over from over Rs100 million to Rs250 million. The minister said the women enterprises have been given a 25 percent rebate in tax. He said that these initiatives have already been taken by the government.
He said, in case the businesses fail, 40 to 60 percent loss would be borne by government and commercial banks. He said the government had already earmarked Rs23.5 billion for the purpose. He said there were several other schemes the government would introduce to promote the SME sector.
Under the SME policy, productive businesses will be given 57 to 83 percent special exemptions in taxes. He said special exemption in taxes will be given to women entrepreneurs in order to ensure their greater participation in businesses.
The minister for industries and production said that an amount of Rs30 billion has been allocated for the Small and Medium Enterprises Authority for a period of five years.
Bakhtiar said that this is for the first time that the policy comes with a proper implementation mechanism. He said the policy was made in 2007 but only in papers and asserted that this time it is being introduced with an implementation mechanism under the supervision of the National Coordination Committee with proper deadlines of tasks.
Elaborating various initiatives of the policy, the minister said that the policy is not only directional but many of its initiatives have already been implemented.
He said the ‘zero time to start up’ initiative has been introduced under which the sector has been divided into three categories including low, medium and high-risk SMEs.
He said that the policy also introduces a self-declaration scheme under which the businessmen would follow the relevant laws voluntarily. He added that only 2 percent of the self-declaration would be inspected physically, adding that the government had developed a web portal, through which the businesses that are going to be inspected would be given the date of inspection. – TLTP