Karachi: The Union of Small and Medium Enterprises (UNISAME) has voiced strong criticism of the fiscal budget for 2025-26, highlighting several points of contention that it believes will adversely impact small and medium enterprises in the country. The organization’s president, Zulfikar Thaver, expressed particular concern over the introduction of an 18% sales tax on solar panels, an increase in income tax on bank deposits, and the removal of tax exemptions for eCommerce and freelancers.

Thaver remarked that the imposition of the sales tax on solar panels would make it difficult for small businesses to invest in affordable energy solutions. This move, he argued, runs counter to the needs of SMEs striving to generate their own electricity amid rising energy costs.

Another point of contention is the increase in income tax on profits from bank deposits, which has been raised from 15% to 20%. Thaver suggested that this policy could discourage savings, questioning the logic behind such a decision.

Additionally, the removal of tax exemptions for eCommerce, freelancers, and online small businesses was criticized as a short-sighted approach. Thaver noted that these sectors are often composed of young entrepreneurs seeking alternatives in a challenging job market, where large-scale industrialization is not occurring.

He emphasized that the government had previously signaled an intent to reform and support the SME sector, but the new budget seems to undermine those aspirations. UNISAME has continually advocated for policies that recognize the crucial contributions of SMEs to employment, exports, GDP growth, and poverty alleviation.

Thaver urged Prime Minister Shehbaz Sharif to convene a meeting with relevant stakeholders, including his special assistant Haroon Akhtar and representatives from the Small and Medium Enterprises Development Authority (SMEDA) and UNISAME. The purpose of this meeting, he suggested, would be to understand the sector’s needs for marketing, technical support, and technological modernization.

The UNISAME Council stressed the urgency of addressing these issues, warning that any delay in supporting the SME sector could have significant negative consequences.