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Asad Umar, PTI’s finance minister-designate revealed an SME expansion plan which says:
- 3 year tax holiday – to be increased to half the rate for the next two years
- Easy financing
- Support in skill training
- Special tax rates for engineering, agricultural and garments value-added sector
A thorough survey of our existing SMEs – that are doing a wonderful job at import substitution and job creation – has revealed the following:
- All avoid coming into the tax net
- All point towards bureaucracy as the main hurdle in the expansion
- Financing for expansion is too cumbersome to acquire
- The risk is too high in case the project fails
- The government institutions act as extortionists
- Finding talented manpower is impossible
- There is no legal protection in case of disputes
The following are the recommendations to boost the SME sector, which is the backbone of employment:
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- Enforce the rule of law and make arbitration simple and cheap.
- Privatize some tax collection functions, especially toll, levy, surcharge, border imports, Value Added
- Digitize the economy like India and investigate every transaction beyond Rs 50,000
- Let the provinces collect their own taxes – Federal government to handle GST, services, income, and tariffs.
- Heavily Spend on skill training at the schools – preferably freelance work online
- As President Reagan said, ‘less government is the only good government’. So, ruthlessly slash deadwood people and procedures that border on extortion and criminal neglect – and I mean at every institution.
- Give financial protection from total ruin to SMEs from state coffers
- Muscle countries around us to open up their market for our mediocre SME products, so our SMEs evolve
- Force the financial sector to introduce hedge funds and instruments to fund SMEs with promising innovations.
- Digitize the government sector; all procedures and rules have to be displayed online for all decision making to make IT platforms
- Our commercial councilors to facilitate difficult to import components for Value Addition inside the country.
- Make it simpler for SME owners to temporarily import super skilled manpower and pay them in US Dollars
- Encourage Patenting, research publications by financial rewards and punish Intellectual Property Infringements
- Enforce labor laws to protect vulnerable workers from blood-sucking bourgeois
- Hand over Mother Ship engineering complexes to wealth funds so that the hatchlings in the private sector flourish under their wings
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