Daily Times

Traders across major cities of Pakistan observed a shutter-down strike on Wednesday against the government’s much-touted tax reforms, including the Tajir Dost Scheme.

In March, the Federal Board of Revenue (FBR) introduced the ‘Tajir Dost Scheme’ to bring traders and wholesalers into the formal tax structure as required by the International Monetary Fund (IMF). The move had led to concerns and reservations among the traders.

Earlier this month, the traders’ community, including Markazi Tanzeem-i-Tajran Pakistan and All Pakistan Anjuman-i-Tajran, announced a nationwide strike against the Tajir Dost Scheme as well as heavy taxation and inflated electricity bills.

Trader’s bodies have decried the tax challans – to the tune of Rs60,000 – issued to small businesses and retailers, saying those registered under the scheme were promised they would not have to pay more than Rs1,200 in taxes.

The expansion of the country’s tax base will now pose a significant challenge for the PML-N and its coalition partner, the PPP, as the protesting traders have political affiliations with these parties.

Nevertheless, opposition parties – Jamiat Ulema-i-Islam-Fazl, Jamaat-i-Islami (JI), and the Awami National Party – have declared their support for the agitating traders.

Shutters in various parts of the country – including the metropolitan cities of Karachi and Lahore – remained closed as the call for strike from traders’ associations received an overwhelming response from the community.

Rana Ihsan Afzal Khan, Coordinator to Prime Minister Shehbaz Sharif, stated that the federal government will not yield to pressure from traders, asserting that retailers must enter the tax net. In a statement released on Wednesday, Ihsan Afzal said, “We will not shy away from negotiations, but we will not come under the traders’ pressure. If the traders believe we are making a mistake, we are open to sitting down again.”

He further mentioned that Prime Minister Shehbaz intends to restructure the Federal Board of Revenue (FBR), emphasising that the retail sector must be brought into the tax net.

Meanwhile, FBR sources indicated that the Federal Board of Revenue is prepared to accommodate changes in the tax scheme according to traders’ preferences to address the issue of tax collection from traders.

According to FBR insiders, if traders agree, an amendment note could be issued immediately. The draft includes a provision to exempt small traders from taxes.

An income tax return form will be made simple and available in easy-to-understand Urdu. There is also a proposal not to apply sales tax on annual turnovers of up to Rs100 million.