FAISALABAD: Cash flow crunch is the main cause of 12-15 percent decline in exports of the SME sector and the government is trying its optimum best to settle this issue on top priority basis, said Shaukat Tarin, Federal Minister for Finance.
Talking to a delegation of SME sector headed by Imran Mahmood Sheikh, Senior Vice-President Faisalabad Chamber of Commerce & Industry (FCCI), he said that on the directive of Prime Minister Iman Khan, he is in touch with the stakeholders to settle down their genuine issues up to the entire satisfaction of the SME sector.
He said that regular meetings with the representatives of this sector would be held after every 21 days as follow up of the previous meeting and review progress made so far on the previously identified issues.
He assured that Rs 50 billion stuck up under the head of DLTL would be paid very soon and in this connection a notification would be issued that would be effective from 1st July 2021. Deputy Governor State Bank of Pakistan Madam Seema Kamil also participated in the meeting online and assured that the SME sector would be allowed to purchase five-year-old machinery under Long Term Finance (LTF) facility.
Imran Mahmood Sheikh paid his best gratitude to the Prime Minister Imran Khan as on his directive all concerned departments are taking stakeholders of the SME sector on board.
He said that no doubt SME is contributing a major share in the exports but individually they have limited financial resources and could not perform as their cash is generally stuck up in sale tax refund regime.
He said that it is the main cause of decline in exports of the SME sector and the Government must pay serious thought to it. Regarding DLTL, he said that it was allowed on fabric, dyed and printed; hence it should continue to maintain the growth trajectory.
He pointed out that closure of the FASTER system was causing problems but with the intervention of the Finance Minister, it has been made functional. Imran Mahmood Sheikh requested the deputy governor SBP to arrange a meeting with SBP governor to resolve the finance-related problems of the SME sector.
He said that the limit of collateral free loan is Rs 10 billion which is not sufficient after the appreciation of dollar; hence it should be enhanced to Rs 20 million. He also expressed concern over the reducing the time limit for the repatriation of foreign proceeds from 180 to 120 days and said that it must be reverted back to the 180 days. About the eligibility of the SME sector, he said that the units with turnover of Rs 800 million fall under the definition of SMEs.
He said that it should also be enhanced to Rs 1.5 billion to encourage the SME sector. Arif Ihsan Malik, Engineer Bilal Jamil and Shehzad Ahmad were also present during this meeting.
Copyright Business Recorder, 2022