Karachi: The Union of Small and Medium Enterprises (UNISAME) has raised concerns with Prime Minister Shehbaz Sharif about the negative impact on legitimate SME exporters caused by the misconduct of a few large exporters. These larger entities have reportedly exploited the fixed tax regime (FTR) to engage in money laundering and other illicit practices.

According to Union of Small and Medium Enterprises, the government's decision to eliminate the FTR came after discoveries that some big exporters were misusing the system. These exporters allegedly made their undisclosed funds appear legal through fake advance payments for export orders. This misconduct has prompted international and national anti-money laundering agencies to alert the government, particularly pointing out abuses in the textile and commodities sectors.

UNISAME officials stressed that SMEs are not involved in these fraudulent activities and that the punitive measures intended for major offenders are unfairly affecting smaller businesses. They argue that some practices, such as accommodating buyers in countries without official foreign exchange systems, are necessary for maintaining business relationships, yet they ensure that full taxes are paid on these transactions.

The union is advocating for a more nuanced approach to tax regulation, suggesting that the government negotiate different FTR rates for various sectors. They also emphasized the importance of exempting essential goods like food and medicine from increased rates, in line with global standards.