The government’s widely publicised tax reform agenda is set to encounter significant opposition today, as traders across the country plan a nationwide strike. The strike, organized in response to the recent tax measures, has garnered partial support from several political parties and trade associations.
On Tuesday, representatives from the traders’ community met with Federal Board of Revenue (FBR) officials, including Chairman Rashid Mahmood, to voice their dissatisfaction with the Tajir Dost Scheme introduced in April and the newly implemented tax rates that came into effect in August. Despite these discussions, the FBR remains firm on its stance, with Mr. Mahmood emphasizing the necessity of the reforms to expand the tax base.
The tax reform measures, particularly those targeting the retail sector, have become a political flashpoint. The retail sector, which contributes approximately 20% of the country’s GDP, remains largely untaxed. The FBR’s plan to bring this sector under the tax net has met with resistance, especially given the political affiliations of many traders with the ruling Pakistan Muslim League-Nawaz (PML-N) and its coalition partner, the Pakistan Peoples Party (PPP). However, opposition parties, including Jamiat Ulema-e-Islam-Fazl (JUI-F), Jamaat-e-Islami, and Awami National Party (ANP), have declared their support for the protesting traders.
During the meeting, FBR Chairman Mahmood assured the traders that the board is open to addressing legitimate concerns and making necessary amendments to the relevant Statutory Regulatory Orders (SROs). However, he stressed that the Tajir Dost Scheme, which is central to the FBR’s efforts to broaden the tax base, will not be withdrawn.
The scheme, formalized through SRO 457 of 2024, outlines special procedures for taxing shopkeepers in 42 cities, with monthly rates ranging from Rs100 to Rs20,000 based on the fair market value of their stores. A subsequent SRO issued in July further specified the area-wise monthly advance tax rates for traders.
The Karachi Chamber of Commerce and Industry (KCCI) has called on its members to fully support today’s strike by closing their businesses. KCCI President Iftikhar Ahmed Sheikh has demanded the withdrawal of the Tajir Dost Scheme and the cancellation of advance tax notices issued to traders, which include demands for Rs60,000 per month.
The SITE Association of Industry and the Korangi Association of Trade and Industry have also thrown their weight behind the strike, with their respective leaders urging the government to address the business community’s demands swiftly.
At a press conference held at the National Press Club, Kashif Chaudhry, President of the Central Association of Tajran Pakistan, declared that today’s strike would serve as a public referendum against the government’s tax policies. The business community’s unified stance highlights the growing tension between the government and traders, with the outcome of today’s strike likely to have significant implications for the country’s economic landscape.
