The Union of Small and Medium Enterprises (UNISAME) invited the immediate attention of Federal Finance Minister Dr Abdul Hafeez Shaikh to the step-motherly treatment given to Association of Persons (AOP) in the budget and urged him to immediately amend the notification otherwise most of the SME partnerships will be dissolved and this would disintegrate the sector.
President Unisame Zulfikar Thaver speaking on the budget pointed out that the government has levied 25 per cent income tax on the income of AOPs and no exemption of Rs300000 is applicable for firms as against individuals whether salaried or self employed who have been given exemption.
Secondly, he said that the government should have adopted the graduation system of taxation rather than the straight system where a person who is earning upto Rs300000 is exempted from tax but if he is earning Rs300001, he has to pay tax at the rate of 7.5 per cent on Rs300001 and up to 25 per cent as the income increases which is against the norms of taxation and needs immediate amendment.
Thirdly he pointed out that the Ministry of Finance has not taken the SME definition into consideration and have imposed 1 per cent minimum turnover tax on turnover of more than Rs50 millions.
