In the upcoming federal budget, a special export support package for Small Medium Enterprises (SMEs), freight subsidies and financial assistance for international exhibitions is an urgent necessity to improve their performance, according to the Federal B Area Association of Trade and Industry (FBATI).

In budget proposals sent to the finance ministry, FBATI President Sheikh Tehseen demanded a separate tax system for SMEs and large industrial units. Taxation for SMEs should be determined by reasonable profit and turnover thresholds, while a separate structure should apply to large enterprises.

The association proposed easy, low-markup financing schemes for rapid SME developmentsobusinesses can increase their production capacity. Interest-free or low-markup loans should be provided for machinery upgrades, automation, digitalisation, and the purchase of energy-efficient equipment.

Electricity tariffs for the industrial sector, particularly SMEs, should be reduced, with significant cuts in fixed charges, peak-hour charges and other surcharges. The proposals further state that uninterrupted supply of electricity and gas should be ensured so that production costs and timely completion of orders are not affected.

SMEs should be exempted from complex withholding tax obligations, or procedures greatly simplified. Timely payment of sales tax refunds and other government dues is needed to ease working capital pressure.

Special funds should be allocated for infrastructure in industrial areas, including roads, drainage, security, and utilities. The proposals also suggest that new SMEs and startup manufacturing units be given special tax incentives for the first three to five years to boost employment and investment.