KARACHI: President of the Karachi Chamber of Commerce & Industry (KCCI) Muhammad Jawed Bilwani has urged the Sindh government to consider reducing the rate of the Sindh Employees Social Security Institution’s (SESSI) social security contribution by at least 2.0 per cent and to freeze this rate.
This adjustment aims to minimize the substantial burden placed on industries each year due to increases in the minimum wage and the resulting impact on social security contributions.“Given the hardships faced by the poor in this era of inflation, the business community has begun complying with the Sindh Minimum Wage Board’s decision to raise the minimum wage to Rs37,000 starting July 1, 2024. However, this hike has also affected SESSI’s social security contribution, which is currently set at 6.0 per cent,” he said.
He emphasized that the Sindh government must recognize the difficulties industries are experiencing due to the excessively high cost of doing business and should announce relief in the form of a 2.0 per cent reduction in social security contributions.
Bilwani pointed out that industrialists are currently contributing Rs2,590 per worker each month, which he considers too high and unaffordable. Although this amount may seem small on an individual basis, it accumulates significantly. For instance, if an industrialist employs 1,000 workers, their contribution to SESSI would total Rs2.59 million per month and Rs31.08 million per year -- an amount that is undoubtedly substantial and challenging for many industries to manage.
Some large-scale manufacturing sectors employ between 5,000 and 7,000 workers, making it extremely difficult for them to cover expenses such as salaries, social security contributions, and utility bills.