KARACHI: Commodities importers and wholesalers see the withholding tax as “reign of taxation” to unleash the storm of food inflation in the country amid growing world market prices.
They also signalled to go for an all-out shutter-down strike across the country in the first phase of the protest following with a closure of businesses in the subsequent phases against the higher taxation.
They blamed the fiscal budget 2024-25 for constituting “unexplained” and “oppressive” taxes, which are all poised to jolt the traders and consumers. At least 10 percent rise in prices of daily use groceries like pulses or rice will hit the nation, they said.
Wheat most important food commodity, govt told
Importers warned that the withholding tax will unfold its impact from import stage of the commodities through retail end, fearing that the relentless taxation will eventually bury the poor under the unbridled inflation.
Higher taxation in the country coupled with the growing prices on the world market will make food grains like pulses dearer for the consumers, asking the government to chalk out a tax management plan to protect the traders from fall and poor from starvation.
“Once the withholding tax starts enveloping businesses from import to retails after July 31, the inflation will start like a swirling storm,” Abdul Rauf Muhammad Ibrahim, Chairman Karachi Wholesalers Grocers Association (KWGA) said.
The GST at 18 percent rate will further add to the commodities inflation on the retail market, he said that the spiralling effects of the taxation will also scale back the wholesale businesses, which eventually will force the importers to slow down their imports.
“A plan is under consideration by the wholesalers to go for a countrywide strike against the higher taxation, fuel oil and electricity tariffs,” he confirmed, saying that the next month is likely to see a surge in food grains prices.
He question whether what businesses can sustain at an electricity tariff of Rs93 a unit, saying that the traders are feeling compelled to hand over their setups to the FBR since being unable to pay hefty taxes and energy bills.
Criticizing the ‘tajir dost tax scheme’, he said that the government has given a complete authority to the FBR for an arbitrary and oppressive taxing the commodities businesses.
He urged the government to scrape the withholding tax regime to help slow down the inflationary trend, warning that the basic staple mainly the poor or low income households rely on will become costlier at least 10 percent from August onwards.
Rauf, who is also a pulses importer, said that the country is likely to see weak pulses holdings this year primarily from changing climate that has hit globally crops. “India has already unleashed its huge buying of pulses that triggered the global market upward,” he added.
Kala Channa, he said is available at $1000 a metric ton on the world market, which is priced for Rs300 a kg on the wholesale market in the city. Similarly, “Dal Masoor” whole is selling for $860 per metric ton and locally wholesaled for Rs270 to Rs285 a kg, he added.
He quoted that price for white Channa is ranging from $800 to $1400 a metric ton, depending on its size, which the wholesalers tag for Rs400 to Rs470 a kg. Moung whole is selling at $1200 a metric ton to Rs320 to Rs240 a kg on the wholesale market. Dal Channa is at Rs330 to Rs340 a kg.
Dal Mash washed is priced for Rs510 a kg on the wholesale market, he said that the price of rice varieties will also change to upward once the taxes begin. He said that kernal basmati is now wholesaled for Rs330 a kg with other varieties ranging from Rs165 to 300 a kg.
Copyright Business Recorder, 2024
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