FBR URGED TO RECONSIDER MODIFICATION OF COTTAGE INDUSTRY DEFINITION RATIONALLY

The Union of Small and Medium Enterprises (UNISAME ) has urged the Ministry of Finance (MoF) and Federal Board of Revenue (FBR) to reconsider the modification of the cottage industry definition and not to shrink it in the light of rupee depreciation and inflation.
President UNISAME Zulfikar Thaver said instead of broadening the definition to encourage the under privileged sector they have narrowed the definition to a very low level to the detriment of the micro entrepreneurs.
The definition of cottage industry in section 2(5AB) has been modified. The annual
turnover threshold has been reduced from 10 million to 3 million and three new criteria have been added in the said section. To qualify as cottage industry, all the four conditions will have to be fulfilled. The conditions are as under:
(a) does not have an industrial gas or electricity connection;
(b) is located in a residential area;
(c) does not have a total labour force of more than ten workers;
(d) and annual turnover from all supplies does not exceed three million Rupees.
UNISAME experts lamented that the FBR has failed to see the matter in its true perspective and have ignored the rupee depreciation and instead of supporting and facilitating the micro entrepreneurs they have curtailed them harshly.
Thaver called upon the Small and Medium Enterprises Development Authority (SMEDA) and the State Bank of Pakistan (SBP) SME Department to intervene and save the micro entrepreneurs from setback caused due to this unwise negative step of the FBR.
Thaver questioned the wisdom behind this modification reducing the turnover from 10 million to 3 million and said whilst the Unisame was pursuing with the microfinance banks to enhance credit to the micro entrepreneurs to free them from the clutches of the unauthorized money lenders, the FBR comes up with this setback.
UNISAME has been trying to bring them to the next level and in fact working hard to enable the micro to medium sized sector to grow on fast track. In fact it has pleaded for broadening the definition of the micro, small and the medium in view of the depreciation of the rupee which is rational and logical.
UNISAME experts have urged the MoF and FBR to reconsider the definition of the cottage industry rationally and save it from setback and turmoil.

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