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More than 250 restaurants in Islamabad to close next week in protest

Updated April 21, 2019

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Restaurant association representatives say they will not reopen until assured they will not be treated like "thieves". —
Restaurant association representatives say they will not reopen until assured they will not be treated like "thieves". —

ISLAMABAD: More than 250 restaurants in the capital have announced that they will be closing from April 23 to protest alleged harassment and humiliation by the Federal Board of Revenue (FBR).

The action was taken on the call of the Islamabad Restaurants Association (IRA). The restaurants have said they will not restart their businesses until they are assured that they will not be treated like “thieves”.

An IRA member who asked not to be named said that the FBR approached restaurants last year and asked them to cooperate in the installation of the restaurant invoice monitoring system (RIMS). They were told that the FBR would not ask for physical accounts as they would now be monitored in real time.

Restaurant association representatives allege harassment by FBR, say they will not reopen until assured they will not be treated like ‘thieves’

The RIMS is an automated system installed at restaurants to monitor all transactions and number of bills received.

“Although there are around 3,000 restaurants in the capital, members of our association agreed and allowed for RIMS to be installed. The FBR praised us and gave us certificates saying we were cooperating, and we were informed that section 40-B would not be imposed on us,” he said.

Under section 40-B, FBR officials can monitor transactions in person at restaurant or store counters.

The representative said that the FBR suddenly raided restaurants this week and their officials began sitting at counters.

“We have no choice but to close our restaurants, as we have been humiliated and treated like thieves,” he said.

Another representative from the association said that business has fallen by 35pc because of the recession in the economy and the devaluation of the rupee.

“Our margins are being squeezed day by day and it is visible on the RIMS, but the FBR believes that we have been trying to avoid the 17pc general sales tax (GST) and has been issuing notices to us. The fact is that people have stopped visiting restaurants because their income and their financial position has suffered due to the devaluation of the rupee,” he said.

He added that the FBR should invite the IRA and listen to its point of view, but has instead been sending in officials who sit at the restaurants and threaten their employees.

“The FBR needs to understand that there is a link between consumer behaviour and our business. People stop eating outside during recessions. It would be a better option for us to close our restaurants and invest our money in property. We have been creating a trickle-down effect, as a number of other industries are run because of us. We have no choice but to close our restaurants,” he said.

An IRA representative said it was unfortunate that the FBR was grilling registered restaurants.

“There are around 3,000 unregistered restaurants in the city, but the FBR has been taking action against those who have been paying GST and installed RIMS. On the other hand, the restaurants that refused to install RIMS are not being asked, despite the fact that they do not even pay GST,” he said.

He added: “Each restaurant has been providing employment to around 150 people directly and around 1,000 people indirectly, but it seems the government is interested in increasing unemployment,” he said.

FBR representative Dr Hamid Ateeq could not be reached for comment despite repeated attempts. However, an FBR official who asked not to be named said notices were issued to the restaurants for a number of reasons.

“Although RIMS has been installed at some restaurants, we have observed that sometimes the RIMS remains offline for two months. In some cases, all the entries are made at midnight, which is not correct at all. That is why action was taken against the restaurants that had issues,” he said.

A restaurant owner said that in case of any complaints the FBR should contact the IRA instead of taking action against them. He said the chamber of commerce was also being involved to address the matter.

Published in Dawn, April 21st, 2019