Markets closed in Punjab to protest withholding tax

LAHORE: A complete shutterdown strike was observed in the wholesale markets here on Tuesday against the imposition of 0.6 percent withholding tax on all bank transactions by the Federal Board of Revenue (FBR).
The strike was also observed against the new tax in various other cities of Punjab, including Faisalabad, Sialkot and Okara. Traders also staged a sit-in in Okara. The wholesale markets of Lahore are a major source of supply for all the district markets of the province. Thus, by closing the wholesale markets successfully, the traders also effectively impacted business activities in the entire province.
However, some retail shopping markets remained open in the city due to Eid shopping. This was part of a strategy to close the wholesale markets in the first phase and keep retail shopping markets open to facilitate people. As per the strategy, if the government does not the imposition of the withholding tax, then all business activities will be halted in the next phase, according to trader leaders.
Those markets which remained completely closed on Tuesday include all markets in the Walled City including Rehman Galiyan, Azam Cloth Market, Pakistan Cloth Market, Urdu Bazaar, Mochi Gate, Delhi Gate, Iron Market, Circular Road, Akabri Mandi, Chemical Market, Brandreth Road, Sooha Bazaar, Badami Bagh Auto-Parts market, and Hall Road.
The markets which remained open were Anarkali, Ichhra, Shadman, Abid Market, Gulberg markets, Cantonment markets, Model Town Link Road, Township, Karim Block Market, Allama Iqbal Town markets while The Mall shops were partially opened.
The Progressive Group in the Lahore Chamber of Commerce and Industry (LCCI) congratulated the traders for showing exemplary unity on the issue of imposition of 0.6 per cent withholding tax by observing a complete strike. Group’s President Khalid Usman, Vice President Abdul Wadood Alvi and Secretary Information Muhammad Ijaz Tanveer told trader leaders of different markets that such steps were right of the businessmen to press the government for acceptance of their demands.
They said profit generated through any financial activity is understandable but taxing banking transaction is something beyond understanding. They termed this type of taxes a cruelty. They said this tax would be applicable even to the pensioners and widows who would draw their savings from the banks.
Khalid Usman said the government and the FBR always talk about increasing reliance on direct taxes, but this new tax was an indirect tax. Rather it was the worst example of double taxation which would badly affect the business community.
Muhammad Ijaz Tanveer said traders and businessmen always believe that the PML-N government would take business-friendly steps. But imposition of such taxes proves people’s perception about the PML-N wrong.
He said traders support increasing tax net but the government should bring those sectors in the tax net which are not paying taxes currently.After the strike call, the federal finance minister had invited traders for a meeting on Thursday. However, the traders did not change their mind, as they believe that if they will call off their strike it will ease out the government and tax will not be revoked.
Traders believe the new tax will promote undocumented and non-bank economy which will adversely affect the government efforts to document the economy. In Faisalabad, A complete strike was observed by traders in the main business centres against 0.6 percent withholding tax on bank transactions.
The trader leaders said the tax would prove counterproductive as the non-filers would resort to cash business and black money market would grow. Furthermore, the business turnover and volume of trade would be restricted, negatively impacting the economic activity and national economy, they added.
They said that the industrial sector would also suffer as the suppliers would demand cash payments, thereby defeating the documentation objective. They urged the government to immediately withdraw the 0.6 per cent withholding tax. They warned of taking to the streets if the government did not withdraw it.
In Okara, traders belonging to different local business organisations staged a sit-in against the new withholding tax on bank transactions. Anjuman-e-Arthian President Habibul Haq, Fertilizer Dealers Association President Sheikh Irshad Ahmad, Anjuman-e-Tajran President Haji Muhammad Saleem, the Rice Dealers Association and the commission agents staged a sit-in in the grain market against the withholding tax.
Later, addressing a joint press conference, they demanded the government withdraw the tax with immediate effect otherwise they would launch a countrywide strike. Sialkot Chamber of Commerce and Industry (SCCI) President Fazal Jilani flayed the new tax. He said the issue had created unrest among the business community and it needed to be addressed on urgent basis. He said that already the issue of increase in ratio of sales tax from 2 to 3 per cent on five export sectors was badly affecting the industrialists-cum-exporters. He said arbitrary policies without any consultation with the business community would be of no help. He said Federal Finance Minister Ishaq Dar had promised to visit the SCCI after Eidul Fitr.