KARACHI, May 8: The Union of Small and Medium Enterprises (Unisame) has urged Finance Minister Shaukat Aziz to enhance the income tax exemption limit from Rs80,000 to Rs200,000.

In its budget proposals for 2004-05 the Unisame pointed out that rapidly increasing cost of living had crippled the family budgets, particularly of middle class which mostly belong to salaried bracket people.

Consequently, the Unisame feels that the government should give substantial relief in the next budget to this class. It is ironic that the salaried class is over burdened with the high cost of utility charges and as a result major chunk of their income is sucked by utility bills.

It drew the attention of the finance minister towards the grave problem confronting fixed income group in particularly and masses in general that in the absence of any medical care, education, supply of potable water, security, which are responsibility of government, the high rate of taxes has no justification.

The Unisame expects such issues confronting common man would be taken care in the next budget and the much needed relief would be given.

It also suggested that some special package should be announced for the growth of small and medium enterprises if the government wanted to get rid of unemployment, therefore, it was imperative that SMEs should be encouraged.

For achieving these goals the Unisame wanted the government to bring in special reforms where cost of production could be reduced, particularly by cutting down utility charges. Similarly, reduction in import duties on raw materials and capital goods (plant and machinery) would also help promote SMEs.

It also demanded tax holiday for new units so that fresh investment was encouraged and the menace of smuggling was also checked. The Union also demanded that full refund of import duty should be allowed on goods meant for re-export. Like export refinance, it is suggested that refinance at 3 per cent for machinery would encourage industrialization.

The Union for promoting industrial and export culture also suggested that leasing of machinery without equity and easy instalments on hire and purchase should be allowed. The government should provide land at concessional rates to new units to minimize initial cost of investment.