KARACHI: The Small and Medium Enterprises Development Authority (SMEDA) has urged the federal government to introduce reforms in the upcoming budget to strengthen Pakistan’s SME sector.
Mashood Khan, Director of SMEDA, presented nine key proposals targeting port charges, export facilitation, tax relief, and energy costs to improve the competitiveness of Pakistani businesses in the international markets.
SMEDA flagged excessive wharfage and port handling charges as a major burden on small businesses, calling for a uniform charge structure across the Karachi Port Trust (KPT), the Port Qasim Authority (PQA), and the Gwadar Port.
The authority also raised concerns over artificial raw material shortages and unjustified price hikes by local distributors, urging the government to monitor market practices and ensure supply chain stability.
On the export front, SMEDA recommended that commercial attachés in GCC countries, Europe, and Australia play a more active role in connecting SMEs with international buyers.
It also proposed government-backed export consolidation programs, enabling multiple SME products including kitchenware, engineering goods, and handicrafts should be shipped in a single Full Container Load (FCL) to reduce logistics costs.
Pakistan’s auto parts sector, identified as having significant export potential, was said to require financial support for international certifications. With IATF 16949 costing around Rs700,000 and ISO 14001 approximately Rs500,000 per company, SMEDA called for dedicated budget subsidies to help manufacturers access global automotive supply chains.
To ease administrative pressure, SMEDA proposed exempting SMEs with annual turnover below Rs500 million from routine audits by multiple agencies, including Income Tax, Sales Tax, EOBI, and Labour departments.
Additional automotive sector proposals included reducing sales tax on vehicles up to 800cc from 18 percent to 9 percent, raising the State Bank’s vehicle financing limit from Rs3 million to Rs8 million, and extending maximum financing tenure to seven years.
SMEDA also called for targeted relief on electricity tariffs, gas prices, and logistics costs for export-oriented businesses, warning that high energy costs continue to undermine Pakistan’s global competitiveness.
“Supporting SMEs is not merely an economic necessity; it is a strategic investment in Pakistan’s future competitiveness and prosperity,” SMEDA Director Mashood said, urging policymakers to prioritize SME development in the upcoming budget.
Copyright Business Recorder, 2026
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