Traders’ strike

If the government thought that it would get away with imposing a massive tax burden without stirring any protest, it has not taken long for it to be proven wrong. Both industrialists and traders have been threatening to go on strike for weeks now. And now the traders community has announced a shutter-down strike on July 13 (Saturday) against the purported increase in sales tax. This is despite FBR Chairman Shabbar Zaidi’s presser in which he claimed that there was no increase in sales tax apart from that on sugar. The trouble is that it is not just sales tax which traders have been complaining about. It is about the larger environment in which the government seems to be planning to impose punitive taxation on a stagnating economy. Already, sporadic strikes have been underway in smaller towns, including Gujranwala and Faisalabad. Where the top leadership of the All Pakistan Anjuman-e-Tajran (APAT) has dithered, local traders have decided to go ahead with shutter-down strikes forcing it to call for a nationwide strike. If these traders manage to show unity, they could be in a position to place some serious pressure on the government’s economic plan for Pakistan.

Traders organisations have provided the government a 32-point charter of demands. The July 7 deadline has already passed without the government stirring into action. Some of the traders’ leadership has pointed to the harsh conditions laid out in the IMF report released on Monday. The trouble is that it is well-known that the traders community has managed to avoid taxation through collective mobilization for decades. Whenever there are serious efforts underway to bring them in the tax net, traders have managed to break the will of the government. This is not to say that the broader thrust of the protest is not correct. In a marathon meeting in Karachi, PM Imran Khan and the traders could not come to an agreement on the matter. The PM rejected the demand of withdrawing the presentation of CNIC as a condition for sale and purchase.

What is clear is that the issues are not limited to the traders community. Numerous representatives of industries, including textile, builders and automobiles, were present at the meeting and warning that the government’s policies could lead to a complete shutdown. Increasing the tax net was never going to be an easy job, but it is also clear that the government has chosen a more combative way of going about it. With the economy set to perform poorly, it is unlikely that the strikes will stop now. It will be a test of nerves, but it should also allow the government time to perhaps rethink its strategy.