Traders have warned the government of countrywide shutter-down strikes if it imposes the proposed value-added tax (VAT). They also demanded the imposition of Pakistan Development Tax (PDT) to protect the financial interests of the poor masses and the traders.
Small traders have already started protest campaigns to oppose the proposed tax, which the government plans to replace with the exiting general sales tax (GST) from July 1, this year. Traders were of the view that there was already Pakistan Development Tax (PDT), which the traders and the then government in September 1999 had agreed but could not implement because of the military coup d'état in October the same year, still needs implementation to end the chaos and discontent among the businessmen community.
"VAT will not work in the country's business environment," said President All Pakistan Organisation of Small Traders and Cottage Industry (Karachi chapter) Mehmood Hamid. He said that registering of every single sale or purchase of any product would not be possible for traders particularly those in the small cities and towns of the country, as such a job needs a person with authority on accountancy. The hiring of specialised accountants would also increase the cost of business for them.
He said that the country's huge population could not afford to pay such a huge additional tax as the government had already increased power tariffs 20 times and petroleum products 15 times during the last 24 months.
"The imposition of 15 percent VAT will break the back of poor masses in the country and would hamper trade activities," he maintained. He said that PDT of 0.75 percent is a better option for both the government and traders, adding that the IMF's agenda would only serve the interest of the West and not the country's poor masses.
Hamid regretted that the government had become irrational on the VAT issue and wanted to implement it at any cost. He said that the shutter-down strikes would cripple the trade and business activities if the move was materialised in the next fiscal budget.
He said that the government has also set "contemptuous" punishments for the failing traders, which is also against their dignity of being Pakistani citizens.
He criticised the imposition of VAT and said that this kind of tax was implemented only in countries where economic conditions of people and state were good whereas Pakistan's economic indicators were not supportive.
He said that tax was imposed in Virginia, which is an economically prosperous state of the US with only 2 percent, in Germany it was 6 percent, in India it was 8 percent, whereas in Pakistan it was proposed 16 percent, which was unfair.
Mehmood also pointed out that the conditions set for the tax implementation would not be satisfying for traders. Another issue, which he raised, was about the lack of security to the businesses in the country, saying that it is impossible for traders to pay huge taxes because they could be robbed any time even in daylight. If the government did not take its decision back on the VAT until April 14, he said, traders would go on countrywide shutter-down strikes.