ISLAMABAD: Small and Medium Entrepreneur Policy: Government announces Small and Medium Entry Initiative Policy (SME Policy), and an easy finance scheme.
According to the Minister of Industries and Production, under the new policy, 30,000 new businesses will be given unsecured loans up to Rs. 10 million under the Easy Finance Scheme.
Addressing a press conference on SME policy along with Federal Minister for Information Fawad Chaudhry, Minister for Industries and Production Khusro Bakhtiar said that the federal cabinet has approved a cohesive SME policy in the history of Pakistan.
Small and Medium Entrepreneur Policy:
The Industry Minister added:
- Under the policy, tax incentives will be given to the industry.
- Under this policy, unsecured loans will also be given on easy terms.
- There are an estimated 5 million small and medium enterprises in Pakistan.
- There are 35,000 large industries in the country.
- Large scale industries in Pakistan are only 5% and the rest are small and medium scale industries.
- Large-scale employment opportunities exist in small and medium enterprises.
- Small and medium-sized businesses faced major problems, which led to increased business costs.
The Federal Minister said that SMEs have been divided into three categories.
- In the first instance, many sectors do not require a NOC.
- You will no longer have to visit offices to start a business.
- We have done inspections without inspectors and now inspectors will not go like that.
- A portal has been set up in this regard which will eliminate bribery.
Turnover Tax Rate
To make this policy, the Minister of Industry and Production said that:
- The turnover tax has been reduced to 0.25 for the manufacturing sector with a turnover of less than Rs 100 million۔.
- The turnover tax has been fixed at 0.5% for those with a turnover of Rs 250 million.
- 7.5% income tax will be applicable to those with 100 million turnovers.
The Method of Small Loans
Khusro Bakhtiar said that 30,000 new businesses would be given unsecured loans of up to Rs. 10 million. He added that:
- Business plans will be provided by commercial banks. Commercial banks will provide loans up to Rs. 10 million at a 9% interest rate.
- If there is a loss in business, 40% will be borne by the government and commercial banks.
- 4,200 acres of land have been allotted for SMEs in Federal, Punjab, Balochistan, and Khyber Pakhtunkhwa.
- SMEs will also be awarded contracts within government contracts.
- 25% tax exemption has been given to women in the SME sector.
- A fund of Rs. 30 billion has been allocated under SMEDA.
- Up to Rs 80 crore industry will get the benefits of SME policy.
Information Minister Fawad Chaudhry said that we were an import economy and now we have to shift the economy, Pakistan needs a strong industrial base and increase productivity.