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Traders observe countrywide strike against withholding tax

September 10, 2015

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QUETTA: Traders raise slogans against withholding tax on bank transactions during a demonstration outside the press club here on Wednesday.—PPI
QUETTA: Traders raise slogans against withholding tax on bank transactions during a demonstration outside the press club here on Wednesday.—PPI

LAHORE: All eyes looked for any signs of cracks in the government’s resolve to bring the traders into the tax net as wholesalers and retailers observed another successful countrywide strike against the withholding tax on banking transactions by non-taxpayers on Wednesday.

An impressive majority of traders kept their shutters down for the third time in a space of less than six weeks to put pressure on the government for the withdrawal of the tax that it says had been implemented to encourage non-taxpayers to start filing their income tax returns.

Take a look: Traders united against withholding tax, divided in their protest

Although demonstrations were organised in several cities, no incident of violence was reported.

The All Pakistan Anjuman-i-Tajran (APAT) has also announced its future plan to ramp up its protest campaign over the next several weeks after Eidul Azha unless the government withdrew the ‘unjust’ tax.

“The traders will enforce another complete countrywide strike on Oct 7, hold traders’ conventions, block all national highways and organise a long march on Islamabad to stage a sit-in on the Constitution Avenue in the second phase of the protest,” APAT general secretary Naeem Mir told a press conference in Lahore.

The traders are up in arms since the government announced in the budget extending the scope of the withholding tax on cash withdrawals exceeding Rs50,000 per day to all banking transactions made through any financial instrument or account-to-account payments and doubling its rate to 0.6 per cent for the non-filers.

Mr Mir, who dubbed it as jagga tax (extortion), said majority of the markets and business centres in all major cities and towns of Punjab, Khyber Pakhtunkhwa and most parts of Sindh, Azad Kashmir and Gilgit-Baltistan remained closed.

“The traders across Pakistan have proved that they are united against the tax under the banner of APAT,” he said of the support extended by other groups of the Anjuman-i-Tajran.

Markets and business centres remained closed in Lahore, Rawalpindi, Multan, Bahawalpur, Rahim Yar Khan, Sahiwal, Sialkot, Okara, Vehari, Gujranwala, Wazirabad, Sheikhupura and Gujrat.

But the traders in Jhang and Mianwali kept themselves totally away from the strike call.

The government, however, so far remains unimpressed by the strikes and threats by the APAT leaders to close down highways and organise sit-in in the federal capital in the next phase of their protest campaign.

“The government is firm (on its decision to collect withholding tax on the banking transactions by non-taxpayers),” Tariq Bajwa, the chairman of the Federal Board of Revenue (FBR), told Dawn from Islamabad by phone.

Elaborating on the rationale behind imposition of the tax, he said it was implemented to broaden the tax net and it was adjustable for those who filed their income tax returns.

“We had reached an agreement with the traders to remove the difficulties they could face if they start filing their tax returns and halved the rate of the levy for three months till September 30 to facilitate them,” the FBR chief said. “From next month we plan to collect the actual rate of tax,” he said in response to a question.

Political commentators feel that the ongoing standoff between the government and the traders – who are generally viewed as the ‘core constituency’ of the PML-N, particularly in Punjab – could hurt the ruling party politically as traders appear united against the tax across party lines.

“With the Nawaz Sharif government facing tough challenge from Imran Khan’s Pakistan Tehreek-i-Insaf in Punjab, the loss of support from traders ahead of by-elections in Lahore and Lodhran next month and local polls in the province could help opponents of the PML-N,” a Lahore-based political analyst said.

He said the PML-N government was more likely to give in to the pressure of traders than resist it. “If the past is anything to go by, the PML-N has always avoided a collision course with the traders,” he added.

In Islamabad, apart from food outlets, pharmacies and bookshops, all the markets remained closed.

Traders also organised demonstrations in almost every market.

Ajmal Baloch, an Islamabad APAT leader, warned the government that the traders’ next step would be “serious”. “We have shown how to convey the message peacefully to the government... but I think that (Finance Minister) Ishaq Dar thinks he is Ishaq Drone and can shoot us from the PM House. Make no mistake, we will protest on the streets next time.”

In Sindh, most markets and bazaars, corporate business concerns and shopping malls in major cities like Karachi, Hyderabad, Sukkur, Khairpur, Jacobabad and Mirpurkhas remained closed.

In Khyber Pakhtunkhwa, a shutter-down was observed.

Shopkeepers in different markets and bazaars of Peshawar kept their shutters down and held protest rallies.

They also set up camps in Peshawar and held processions.

The trader leaders warned that if the government failed to withdraw the tax they would start a ‘jail bharo tehreek’ and stop payment of all taxes.

A complete strike was also observed in Nowshera, Abbottabad, Charsadda, Mardan and Tank.

The strike remained partial in other districts of the province.

Kohat, Karak, Lakki Marwat, Bannu, Malakand, Swat, Chitral and Lakki Marwat ignored the strike call.

In Balochistan, traders said there was complete shutdown in Quetta, Pishin, Chaman, Ziarat, Loralai, Zhob, Mastung, Kalat, Khuzdar, Hub, Turbat, Sibi, Nushki, Taftan and Jaffarabad.

In Gilgit-Baltistan, main markets and shopping malls remained shut. Traders responded positively to the strike call in Gilgit, Skardu, Hunza and Khapolu.

Lawyers in Gilgit boycotted courts in support of the strike call.

(The report had been compiled from despatches of Dawn correspondents across the country.)

Published in Dawn, September 10th, 2015

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