HYDERABAD: Muhammad Saleem Memon, President of the Hyderabad Chamber of Small Traders and Small Industry (HCSTSI), has warned that small businesses and industries across Pakistan could face widespread shutdowns if the federal government fails to provide meaningful relief for small and medium enterprises (SMEs) in the upcoming Budget 2026-27.
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Speaking on the economic challenges facing traders and industrialists, Saleem Memon said rising taxes, complicated regulations, expensive electricity, and increasing petroleum prices had already pushed the SME sector into severe financial stress.
He stated that additional withholding taxes, a complex taxation structure, and anti-business policies were making survival increasingly difficult for small traders and industrial units across the country.
“If SMEs continue to be ignored in the upcoming budget, thousands of small businesses may shut down, leading to rising unemployment and economic instability,” he warned.
The HCSTSI president urged the government to introduce a simplified tax regime for SMEs in Budget 2026-27 and reduce withholding taxes to encourage businesses to join the formal economy.
He specifically demanded that businesses with an annual turnover of up to Rs50 million should be exempted from strict conditions under Section 111 and unnecessary tax inquiries.
According to him, many small traders avoid becoming part of the documented economy because of fear, uncertainty, and unnecessary procedural complications.
“The government should introduce policies that attract traders toward documentation instead of creating fear through harassment and excessive scrutiny,” he said.
Saleem Memon stressed that SMEs form the backbone of Pakistan’s economy by generating employment, supporting local trade, and sustaining industrial activity in urban and rural areas alike.
Discussing industrial challenges, he highlighted the alarming impact of rising electricity tariffs and continuous increases in petroleum prices on small industries, particularly in Hyderabad.
He said traditional industries including broadloom, textiles, auto parts, handicrafts, embroidery, bangle-making, and cottage industries were struggling to survive due to soaring production costs and expensive energy.
“Several small industrial units have already closed, while many others are on the verge of shutting down,” he said.
The chamber president demanded that the government announce a special electricity relief package for SMEs in Budget 2026-27, reduce industrial tariffs, and take immediate measures to stabilize fuel prices.
He warned that if business costs continue to rise unchecked, industrial activity will decline further, unemployment will increase, and small enterprises could gradually disappear from the market.
Saleem Memon also called on the federal government and the State Bank of Pakistan to introduce low-markup financing schemes for SMEs, young entrepreneurs, and cottage industries to help revive local manufacturing and business activity.
He said high interest rates and expensive bank financing were creating major obstacles for small traders and industrialists trying to sustain their operations.
The HCSTSI president further demanded special incentives, export support, and easy loan facilities for handicrafts, embroidery, bangle-making, and other traditional industries to revive Hyderabad’s declining cottage sector and create employment opportunities.
He emphasized that sustainable economic growth in Pakistan would not be possible without strengthening the SME sector and urged policymakers to prioritize the revival of small businesses in the upcoming federal budget.
