Traders’ protest

If the government thought that it had won its battle with the traders’ community, its had to think again. After a charged protest at Islamabad's Serena Chowk on Wednesday, it is clear that at least this economic group is not ready to comply with the government’s tax reforms. Their protest was met with police baton charge, but it seems traders across the country stand united on this issue. This has led to them announcing a countrywide shutter-down strike on October 28 and 29. For now, it leaves enough room for further negotiations with the FBR and the federal government and the strike could still be cancelled – but as has been seen before, there has been little to stop traders from making their objections to any plan to bring them into the formal tax fold. The most stringent opposition has come against the demand for customers to submit copies of CNIC for the sale and purchase of items valued over Rs50,000. The controversial measure has received much opposition from across different segments of society, but it is traders themselves who feel that the measure will bring down economic activity around the country.

Traders are already suffering from the negative affects of the low consumer demand such a move has led to. This has led to the latest protests coming under the slogan of ‘Saving Traders’. Traders are only one part of the economy that require saving at the current juncture. What is clear is that the government is running out of time to fix the economic direction of the country. The atmosphere remains laden with pessimism, which means that traders will gain sympathy despite some questionable demands. Surely, traders are not right to refuse registration with the FBR, although it is within their rights to question what kind of taxes and reporting requirements will be imposed on them. The traders have asked for a fixed tax scheme without clarifying what this should be fixed against. Should the fixed tax depend on the size of the shop, the volume of trade or something else? The fact is that the IMF had already foreseen that its demands from the Pakistan government would lead to social unrest. It is unlikely that traders are going to give in soon, which means the government would do well to revise its overall taxation strategy – not giving in to non-taxpayers but perhaps looking at a different approach.