Pakistan Traders Strike Over New Taxes

Islamabad, Aug 28 (PTI) Traders across Pakistan observed a nationwide strike on Wednesday to register their anger against the reforms that aimed to widen the tax net in the cash-strapped country.

The strike was held on the call of Markazi Tanzeem-e-Tajran Pakistan and All Pakistan Anjuman-e-Tajran, the two leading associations of the trading community, against the Tajir Dost Scheme introduced by the Federal Board of Revenue (FBR) in March this year.

The FBR had launched the scheme to bring traders and wholesalers into the formal tax structure as required by the International Monetary Fund (IMF).

The higher cost of living and tax hikes have triggered widespread discontent and drawn protests.

The strike is aimed at forcing the government to reverse the recent hikes in the controversial tax that followed the recent talks with the IMF, which wants to see Pakistan broaden its tax base.

The rightwing Jamaat-e-Islami (JI) also joined the strike to press for its demand to reduce the prices of electricity in the country while supporting the traders' demands.

Responding to the call, traders shut their shops and businesses in various parts of the country, including the major cities of Karachi, Lahore, Rawalpindi, Islamabad, Quetta and Peshawar. Rallies in various cities were also held.

JI Karachi chief Monem Zafar told the media that the Tajir Dost Scheme (trader-friendly scheme) was a “Tajir Dushman scheme” (traders' enemy scheme).

“The people do not accept this (taxes) and we once again demand that the politicians stop using delay tactics and giving ‘lollipops' to the traders and the business community,” Zafar said.

Dawn News reported FBR chief Rashid Mahmood as saying after a meeting with traders on Tuesday that his department was willing to resolve “legitimate issues” raised during the meeting. “We are ready to make amendments to the SRO to address their concerns,” he said.

However, he emphasised the FBR would not withdraw the Tajir Dost Scheme, which aims to bring the retail sector under the tax net.

The FBR chief hinted at setting up a market-level review mechanism with representation from tax officers and traders to ensure that no shopkeepers face unfair tax rates.

Under the scheme, tax rates will be collected from shopkeepers in 42 cities across the country at a fixed rate of Rs100 to Rs20,000 per month, based on the fair market value of their stores.

The July deal was Pakistan's latest turn to the global lender for help in propping up its economy and dealing with its debts through big bailouts. Earlier this year, the IMF approved the immediate release of the final USD 1.1 billion tranche of a USD 3 billion bailout to Pakistan.