Not all associations join strike: Traders protest against IMF austerity measures

Markets and wholesale merchants across Pakistan closed on Saturday in a strike by businesses against measures demanded by the International Monetary Fund to crack down on tax evasion and bolster the country's depleted public finances. In Karachi, the country's main commercial city, around 80% of markets dealing in bulk goods were closed, said Atiq Mir, president of the All Karachi Traders Alliance, which represents hundreds of markets in the city.
"Government policies have created mistrust in trade and industry," said Mir, who added that traders were already struggling with corrupt tax officials demanding bribes. Similar strikes were called in other big business centres including Lahore, Rawalpindi, Islamabad and Multan, home to a celebrated ceramics industry.
Not all business associations joined the strike but the move underlines the pressure facing Prime Minister Imran Khan's government, which came to power last year promising millions of new jobs and welfare measures to help the poor. Instead, like so many of its predecessors, it is having to impose tough austerity measures having been forced to turn to the IMF for Pakistan's 13th bailout since the late 1980s.
In Karachi, calm prevailed around the main electronics market in the old city that would normally be bustling on a Saturday with traders selling everything from mobile phones to televisions, refrigerators and air conditioners.
A popular textiles market on Tariq Road in another part of the city was also closed as traders, already struggling to attract customers hit by a sliding rupee and inflation running at around 9%, shut up shop for the day. Under the IMF bailout, signed this month, Pakistan is under heavy pressure to boost its tax revenues to plug a fiscal deficit which has ballooned to around 7% of its gross domestic product, as well as avert a looming balance of payments crisis.
The South Asian country has long suffered from a weak tax base, with only about 1% of its 208 million population filing income tax returns and key industrial sectors dominated by powerful lobbies that pay little or no tax. Among the measures which have roused the anger of traders is a new rule that would require customers buying items worth 50,000 rupees ($315) or over to produce identity documents, a move intended to help authorities to track tax evaders.
"The new condition of the national identity card on purchases of 50,000 rupees or more has created harassment among the people," Mir said. Under the measures agreed with the IMF, the government has also agreed to close loopholes and preferential rates in sales tax on sugar, steel, edible oils and medium and large retailers, hitting many businesses.
"We want zero tax on small retailers. Sales tax should be limited to the manufacturing sector," Mir said. The strike, which follows isolated protests by traders this month, was called after the government refused to agree to the traders' demands to abandon its tax plans.
BR staff reporter from Karachi adds: However, the grain markets in Jodia Bazaar in Karachi remained open because traders there said they were not affected by the taxation measures. Markazi Tanzeem-e-Tajiran Pakistan - Lahore had called for countrywide commercial closure that enjoyed support of most of the country's trade associations, since two rounds of their talks with the government failed. BR reporter from Lahore adds: In Lahore, local markets including Akbari Mandi, Paper Market, Azam Cloth Market, Shahalam Market, Brandreth Road, Chemical market Circular Road, Anarkali, The Mall, Liberty, Hall Road, Bedon Road, Mcleod Road, Chamberlain Road, Town Ship, Ferozepur Road, Auto Part market Badami Bagh, Montgomery Road, Jail Road, Queens Road, Urdu Bazar, Ichhra, Link Road Model Town, DHA and Nila Gumbad remained closed throughout the day on Saturday. However, a few market in the city remained opened.
The leaders of traders' organizations including Pakistan Traders Alliance, Anjuman-e-Tajiran and Qaumi Tajir Ittehad also set up a camp at Faisal Chowk, in front of Punjab Assembly. Talking to media on the occasion, All Pakistan Anjuman-e-Tajiran (APAT) General Secretary Naeem Mir said that traders are ready to pay taxes according to their income. He demanded of the government to simplify the tax system.
He threatened that the traders would not submit income tax returns for the tax year 2018-19 if the government did not pay heed to their demands. Terming the traders' strike a 'referendum' against the federal budget, he said the traders' community wants Prime Minister Imran Khan to take the stakeholders on board for resolution of their problems. He said that imposition of 'unjustified' 17 percent sales tax, turn over tax and CNIC based invoicing system had made it impossible for the business community to run their businesses. He warned the government of strike for indefinite period if the said taxes and conditions were not withdrawn by July 13.
He said that FBR was not ready to listen to traders due to which trading community was worried while the people were also facing massive inflation. He demanded that Prime Minister Imran Khan in consultation with traders should announce amendments in budget; otherwise traders would go for shutter down strike for indefinite period.
Other trader's representatives urged the Prime Minister to change his economic team and initiate dialogue with them. The taxes levied on the IMF direction have broken the backbone of the general public including traders. Under these circumstances, the government would not be able to achieve its revenue collection targets. They also threatened to launch march towards Islamabad to press the government for acceptance of their demands.
Tahir Amin adds from Islamabad: Traders observed a complete shutter-down strike in Rawalpindi and Islamabad, demanding the government withdraw 'anti-business' measures including documentation requirements and taxes introduced in the budget 2019-2020.
Around 95 percent markets remained closed in the twin cities, however, restaurants, medical stores and some general stores remained open.
A visit to different markets of the twin cities revealed that there was no commercial activity in Rawalpindi's Raja Bazaar, Saddar, Murree Road, Bara Market, Moti Bazaar and Imperial Market. In Islamabad, all the shops in F-10 Market, Aabpara, and Blue Area remained closed.
Addressing a traders' gathering at Aabpara Chowk, All Pakistan Traders Association president Ajmal Baloch said Federal Board of Revenue (FBR) and government only hold talks with chambers and avoid smaller traders.
He said 4.1 million registered traders have been ignored by the government. He said shutter-down is not only being observed by traders, but is also supported by all and sundry. Baloch urged Prime Minister Imran Khan to bring in the 'fixed tax system' in the country. He said the bureaucracy has been intentionally failing the government and the premier.
Traders also demanded the government to remove the new condition of presenting CNICs for purchases of over Rs 50,000. FBR chairman Shabbar Zaidi has said the CNIC condition is part of a larger drive against tax evasion because the government is facing a massive budget deficit due to low tax revenue.
There are about 381,000 trading units that fall under sales tax jurisdiction, but only 47,000 of them are registered. Among the registered trading businesses, only 17,000 pay sales tax to the government. The government wants to change that equation by bringing more traders under the tax net. However some criticized the protesting traders saying that the strike is nothing more than an attempt to blackmail the government into maintaining status quo and keeping the economy undocumented to avoid income taxes.
BR reporter from Faisalabad adds: A partial strike was observed in Faisalabad.
Faisalabad Yarn Market, Hosiery Market Jinnah Colony, Cloth Markets and big traders shops remained closed, while small traders and business community totally ignored the strike call.
Faisalabad Chamber of Commerce and Industry and offices of other trade organisations also remained open. All Banks and business establishments remained open as per routine.
Amjad Ali Shah from Peshawar adds: Business activities came to a halt due to traders' strike and a complete shutter-down strike was observed in different parts of Khyber Pakhutnkhwa. However, some local traders distanced themselves from the strike. Around 124 small and major shopping markets and bazaars remained closed in the provincial capital.
To express solidarity with the protesting traders' community, Sarhad Chamber of Commerce and Industry also remained closed on Saturday. The local traders set up a protest camp in Bazar -e-abresham garan Qissa Khawani Peshawar.
The traders' leaders visited Saraf bazaar, Khyber bazaar, Qissa Khwani, Hashtnagri, Chowk yadgar to make the strike successful.
In Peshawar, most of the markets and commercial establishments in Khyber Bazaar, Qissa Khawani, Sikarno Chowk, Ghanta Ghar, Kochi Bazaar, Saddar Road, Karimpur, Hashtnagri and other areas remained shut as part of the nationwide strike. Meanwhile, flour millers announced to observe a countrywide strike on July 17, against the imposition of 17 percent sale tax on flour.