THE approval of Trade Organisation Bill 2013 by the joint meeting of National Assembly and Senate Standing Committees on commerce last month has moved the legislation a step forward for setting up chambers of women entrepreneurs, small traders and representatives of cottage industry in every district.

The bill was passed by the National Assembly in December and its formal approval from the Upper House is expected during the current session of the Senate.

Major beneficiaries of the new law would be eight million small traders, commercial importers, and services providers across the country. At present, the existing chambers exist mostly in the country’s big cities and work for medium and big enterprises or for limited number of people in the corporate sector.

All trade bodies are currently functioning under the Trade Organisation Ordinance 1961 that has certain inherent shortcomings. Important sectors like services, women entrepreneurs, small businesses and cottage industry do not fall under the purview of the ordinance.

Similarly, there is no mechanism for dispute settlement. The rules for trade organisations to become effective businesses’ support forum are found wanting in the Ordinance. There are also some fake trade bodies because of lacunas in the law.

Haji Ghulam Ali, who is heading the Senate standing committee on commerce, secured approval from committee members to pass the bill unanimously. “We have sent the bill to the Senate for approval”, he said, adding that after the approval from Senate the bill would be sent to President Asif Ali Zardari for signature. He said the new Act would allow small traders to establish their small chambers.

“This is a historical decision”, Ali said, “it was a long standing demand of the small traders.”

Generally, it was believed that small traders are not paying taxes. Under the new law, it would be mandatory for small traders to register on the tax roll before becoming formal member of any chamber. After the Act only those traders who will figure on the tax roll and have a valid National Tax Number would be eligible to become member of the chambers. This would be an effort to bring eight million small traders into the tax net.

Aside from representation for small traders, the bill also provides rules for effective implementation of law, definition for territorial jurisdiction for all trade bodies, elimination of fake and bogus bodies, specific period for licensing and built-in mechanism for trade dispute settlement.

The proposed legislation defines small trade/business as an entity whose number of employees is less than 20, annual business turnover ranges between Rs2 million to Rs20 million and all utility bills should not exceed Rs1 million per annum. And neither such small trader nor small business should be owned or controlled by a provincial government. Similar criteria have been introduced in the law for the definition of small industry.

In case of a chamber, it has to have a minimum of 150 members who are either permanently domiciled in the relevant district or have a substantial business interest such as an industrial concern or a corporate business entity. However, the federal government can relax the minimum threshold of membership for chambers depending on the size and nature of the trade.

For women chamber, the minimum number of members is 100. A women chamber of commerce and industry should be engaged in trade, industry or services in each administrative division.

However, such a chamber representing less than the prescribed number of women entrepreneurs shall not be granted licence and where the number of women entrepreneurs desiring to form a chamber is less than the prescribed number, they may join an adjoining women chamber.

In short, the bill will facilitate the small businesses to prosper and promote good business practices.

Unfortunately, the bill was in cold storage for the past four years.—Mubarak Zeb Khan