By Abdul Rafay
KARACHI: President of the Karachi Chamber of Commerce & Industry (KCCI), Muhammad Jawed Bilwani, has urged the Sindh government to consider reducing the Social Security Contribution rate set by the Sindh Employees Social Security Institution (SESSI) by at least 2 percent. He emphasized that freezing the current contribution rate would help alleviate the substantial financial burden industries face each year due to minimum wage hikes and their impact on social security contributions.
Bilwani highlighted the difficulties faced by the business community amid ongoing inflation, noting that industrialists have complied with the Sindh Minimum Wage Board’s decision to raise the minimum wage to Rs. 37,000, effective July 1, 2024. However, this increase has also escalated the social security contribution, which currently stands at 6 percent.
He explained that industries are contributing Rs. 2,220 per worker each month to SESSI, which he considers excessively high and unaffordable. For example, an industrialist with 1,000 workers would need to contribute Rs. 2.20 million monthly, amounting to Rs. 26.64 million annually. For larger manufacturing industries employing between 5,000 to 7,000 workers, these costs can become particularly burdensome, complicating their ability to cover salaries, social security contributions, and utility bills.
Bilwani expressed grave concerns regarding the precarious situation many businesses are facing, suggesting that without intervention, companies might resort to large-scale layoffs. He implored the government to recognize the seriousness of the economic landscape and provide immediate support through a reduction in social security contributions. “This support would not only relieve industries but would also serve as a vital service to society,” he stated.
