- It’s now or never
A number of organisations of the trading community gave a call for a countrywide strike on 13 July against the FBR’s move to bring all traders into the tax net. Other community leaders rejected the call on the plea that most of their demands had already been accepted by the administration. While the traders remained by and large divided in big cities, shutters remained totally down in hundreds of small towns
The trading community is spread all over the country. Hundreds of thousands of traders constitute the vital distribution chain that makes domestically produced and imported goods available to the consumers. There are about 381,000 trading units that fall under sales tax jurisdiction, but only 47,000 of them are registered. What’s more, of the registered trading businesses only 17,000 pay sales tax to the government.
On account of its numerical strength the trading class has been pampered by successive governments, both civil and military. Thus, a large number of traders continue to defy the FBR with impunity. They have invented excuses for dodging the taxes like corruption on the part of the government and the tax officials, high prices of gas and power and absence of facilities available to taxpayers in developed countries. In view of the problematic civil-military relations in the country, elected governments that have looked most of the time over their shoulder, hesitated creating a countrywide confrontation that could be used by forces waiting in the wings to send them home. Considering the conservative trading class as a source of political support, military rulers like Ayub Khan, Ziaul Haq and Musharraf also mollycoddled the community. Facing an acute liquidity crunch which has even affected the defence budget, the PTI government has decided to bring all traders under the tax net. That it enjoys the full support of the Army makes the government’s task easier. It remains to be seen if the government really possesses the required determination.
While disagreeing with some of the tactics being employed, one concurs with the objective of bringing all with taxable incomes into the tax net. The government needs to use persuasion as the chief method, but has to remain firm in case of a pushback.
