PM Shehbaz directs SBP and FBR to resolve SME and exporter tax issues
Prime Minister Shehbaz Sharif on Monday directed the State Bank of Pakistan and the FBR to address tax problems faced by SMEs and exporters. He chaired a meeting on lending to SMEs, housing and agriculture.
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- PM told SBP and FBR to resolve tax issues of SMEs and exporters.
- Banks slow to lend to farmers, SMEs and Apna Ghar applicants should get no concessions.
- Government targets Rs1,500 billion lending each to agriculture and SMEs by end of fiscal year 2027.
Prime Minister Shehbaz Sharif on Monday directed the State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR) to resolve tax-related problems faced by small and medium-sized enterprises (SMEs) and exporters. He gave the instruction while chairing a meeting that reviewed lending facilities for SMEs, housing and agriculture.
The prime minister asked the Finance Ministry to address the financing problems of stakeholders in these sectors and to prepare a comprehensive strategy. He also called for a comprehensive risk-coverage mechanism so that small and medium-sized businesses can obtain loans more easily, according to The Express Tribune.
He directed the SBP and the Finance Ministry not to extend concessions to banks that are slow in financing farmers, SMEs and beneficiaries of the Apna Ghar Scheme. He praised banks that performed well in lending to the three priority sectors. Shehbaz Sharif said: "Banks are of key importance for the development of the private sector".
The meeting was told that the SBP is working on three pillars: improving regulations, sharing risks and costs between the government and banks, and expanding digital facilities. The SBP recently launched the SME Connect digital portal, which lets business owners apply for loans and track their applications.
Figures presented as of October 23 showed that loans worth Rs511 billion were approved under the Apna Ghar Programme, covering 86,899 applications. Of these, Rs91 billion was disbursed to 15,584 applicants. Housing finance reached Rs455 billion, benefiting 187,317 borrowers.
Agriculture lending reached Rs1,329 billion, benefiting about 3.5 million people. SME financing reached Rs1,148 billion, with 342,458 businesses receiving loans. The government has set a target of Rs1,500 billion in lending each to agriculture and SMEs by the end of fiscal year 2027.
Risk-sharing and credit-guarantee measures have been introduced for housing, agriculture and SMEs. Work is under way to simplify loan procedures, reduce documentation and improve digital access to financing.
Federal ministers Ahsan Iqbal, Rana Tanveer Hussain, Dr Musadik Malik, Mian Riaz Hussain Pirzada, Muhammad Aurangzeb, Attaullah Tarar and Shaza Fatima Khawaja attended, as did SBP Governor Jameel Ahmad and representatives of leading commercial banks.
Why it matters
Tax problems and loan difficulties affect small businesses and exporters and the jobs they provide.
