LAHORE-Showing serious concern over a meager cut of just one percent in key policy rate to 8%, the All Pakistan Business Forum on Saturday urged the central bank to announce a soft loan with maximum markup rate of 3% especially for SMEs, as the rest of the world has been providing loans at zero percent markup to bail out their collapsing businesses.

APBF President Syed Maaz Mahmood also expressed dissatisfaction over the financial packages announced by the government for industry to deal with the challenges posed by coronavirus, calling for significant cut in import duties and waiver of sales tax, income tax and additional income taxes which are still being charged in this time of grave crisis.

Maaz Mahmood asked the government to take concrete steps to keep industrial wheels running especially of SMEs, saving the livelihood of millions of workers associated with the small industries. APBF President observed that mere statements would not work unless solid measures are taken by the government including sizable reduction in fuel prices, bringing down key policy rate to 3%, regionally competitive energy rates and substantial cut in duties & taxes or their complete waiver at least in these critical circumstances.

Maaz Mahmood also criticized the seaport terminal authorities and shipping lines for rejecting the recommendations of the government to relax detention cost, besides extending the free period at terminals for charging demurrage owing to closure of businesses, amidst prolonged lockdown in the country. “The APBF endorses the demand of all other trade & industrial bodies as well as chambers of the country to take strict action against those shipping lines and port terminals, which are refusing the government directives to relax detention and demurrage charges at least in lockdown period,” he added. APBF National Board Member and CHT Pakistan MD Haroon Ali Khan observed that the biggest challenge these days is cash flow management.

“We should keep our focus on support for cash flow management for SME sector and government may prioritize its incentive preferences in accordance with the growth and importance for the economy,” he added. The CHT Pakistan MD suggested the authorities to reduce sales tax from 17% to at least 10% to improve demand generation, besides announcing interest-free loans to pay employees’ salaries. The government can adopt a procedure like financing 80% of the salary where salary amount of a company is maximum Rs.10 million per month or financing 60% of the salary where salary amount of a company exceeds Rs.10 million but does not exceed Rs.25 million per month, he proposed.

Haroon Khan urged the FBR to suspend the requirement to pay advance income tax based on last year’s turnover, as it is no more relevant. He further suggested that the government should devise a mechanism to get custom duty in installments for all shipments arriving on port from April to Sept 2020, besides introducing a loan of 3% markup rate for SMEs, having annual turnover of Rs.2 billion.

APBF Chairman Ibrahim Qureshi said that with a view to save the economy from the impacts of the slowdown due to the COVID-19 the government should announce special incentives for a cash-strapped Small and Medium Industry, which represents more than 90 percent of around 3.2 million business enterprises in Pakistan, contributing 40 percent to the GDP, employing more than 80 percent of non-agricultural workforce, and generating 25 percent of export earnings.