Traders end countrywide strike after reaching agreement with govt
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The business community on Wednesday called off the countrywide shutter-down strike after reaching an eleven-point agreement with the government.
The strike, which started on Tuesday, was held against the imposition of taxes, and presenting a CNIC copy for buying and selling goods up to Rs50,000.
Adviser to the Prime Minister on Finance Dr Abdul Hafeez Sheikh, flanked by Federal Board of Revenue (FBR) Chairman Shabbar Zaidi and PTI stalwart Jahangir Tareen, announced the agreement at a press conference in Islamabad.
According to the agreement, the computerised national identity card (CNIC) condition for Rs50,000 purchase will remain intact but any action against its violation has been suspended till January 31, 2020.
The two sides agreed that traders with an annual turnover of Rs100 million would have to pay Rs0.5 per cent of the turnover instead of 1.5pc of the turnover and that the same traders would not become withholding agents.
The limit of electricity bill for registration in sales tax register was increased to Rs1.2 million from Rs600,000.
Under the agreement, the government also agreed to review the rate of turnover tax for sectors with low profit ratio. The review in this regard will be carried out in consultations with a committee of traders. The two sides also agreed to resolve the issues of jewelers on priority basis and in consultation with their associations.
The withholding tax on renewal of brokers' license will also be reviewed.
The adviser also announced that under the agreement, the government will establish an exclusive cell at FBR, Islamabad to resolve the issues of traders on immediate basis. The head of the cell will be a grade 21 or 22 officer who will maintain contact with traders on monthly basis.
The two sides also agreed that the government would introduce simple forms in Urdu language for registration of new traders and income tax returns filing, while the traders bodies will offer full cooperation in the registration of new businesses.
Under the agreement, the government will consult with the traders committee for decision to grant exemption in sales tax to a 1,000 square feet shop. Similarly, the government will take traders onboard for decision about inclusion of those retailers who are also engaged in wholesales business in the sales tax register.
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Comments (50) Closed
Oct 30, 2019 05:23pm
Maulana pressure shows so desperate to delay reformns
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Oct 30, 2019 05:33pm
Good news - Yes we have to regulate our things !
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Oct 30, 2019 05:39pm
How can the government afford to provide services if people are not willing to pay taxes
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Oct 30, 2019 05:42pm
Its good news that atlast agreement among the traders and govt gets done.. Now it is sole responsibility of traders to declare their actual incomes , it is their national plus religious duty. Most of our business community was enjoying more than 100% profits and were not declaring their actual / real sales...
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Oct 30, 2019 05:54pm
Good decisions.
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Oct 30, 2019 06:09pm
better way of handling things. good decisions. will allow SMEs to grow and invest.
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Oct 30, 2019 06:23pm
This whole nation do not pay tax and not willing to pay tax. Yes bring these traders into tax net. They are the one who make most of the money and pay ZERO tax. i
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Oct 30, 2019 06:32pm
We were hoping, you know.
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Oct 30, 2019 06:33pm
Love you, IK.
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Oct 30, 2019 06:41pm
Good. The 50 k condition will help documentation and FATF type compliance
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Oct 30, 2019 06:55pm
This is the only lingo IK understands. Speak from a pisition of strength and he folds like a straw. U-turn number 100,000
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Oct 30, 2019 07:08pm
Very intelligently situation has been handled.Well done team of I K.
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Oct 30, 2019 07:16pm
In other countries this would be termed as tax evasion
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Oct 30, 2019 07:35pm
sometimes I agree with people who are not giving any taxes, taxes for what, Broken roads, no health and education facility, street crimes, no water, and the list goes on, people can't pay tax to pay salary for incompetent government employees (most of them).
People in Pakistan don't even know what facility people get when they pay tax, However,sometimes I agree with government that people should pay tax. I am not sure who is right
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Oct 30, 2019 07:39pm
So on a turnover of 100 million a trader will only pay 500 thousand rupees. Thats so less.
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Oct 30, 2019 07:42pm
95 % Pakistanis and 99 % traders do not want to pay taxes.
They want all the amenties like free school, colleges, health services, municipal services etc.
These people are free loaders, Money does not grow on on TREES.
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Oct 30, 2019 07:45pm
Too late Maulana Fazlur Rehman's surprise caravan of Azadi March is about to reach Islamabad.Traders will have to wait and see the outcome of this very serious development which will affect the Traders and the Pakistan Economy.
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Oct 30, 2019 08:08pm
So while registered companies will pay 6 M income tax on 100 M turnover, these traders will pay only 0.5 M.
Instead of encouraging entrepreneurship, creativity and manufacturing, the govt wants you to be traders.
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Oct 30, 2019 08:22pm
It will take a generation of good governance and enforced compliance before Pakistanis are convinced about the benefits of paying tax. We have great facilities in UK, yet we come across so many self employed people from various third world countries, who are not willing to pay their dues. The alternative to paying tax is to make these traders responsible for maintenance of everything around their trading places.
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Oct 30, 2019 08:23pm
Such a weird deal..govt has given away tax revenue and deferred the cnic requirement and gotten nothing.. fiscal deficit will increase even more..happens only when u have a government which is as clueless pti govt..good deal for traders but bad for revenue collectiob
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Oct 30, 2019 08:27pm
@Jamil Soomro, New York City,
Highly confused.
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Oct 30, 2019 08:28pm
70 years old habit, hard to go away. Paying taxes is normal thing in the world and the traders are being asked for do that. But who is asking them to be normal, an abnormal selected govt.
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Oct 30, 2019 08:44pm
@Ali Turi, It doesn't provide services and no one expects it to. All the money goes to waste on defence.
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Oct 30, 2019 08:49pm
Another U-turn
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Oct 30, 2019 09:04pm
All is well that ends well.
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Oct 30, 2019 09:05pm
@asharbhai, you accept all facilities to be provided by the govt after taking taxes from only 2% people, for example traders numbers 3.5 million, while only 390,000 traders are registered and pay taxes. They also collect sales tax but do not deposit into govt account. This is how these people were living and enjoyed loot mar for so many years, now you understand.
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Oct 30, 2019 09:09pm
Its a total surrendering of Imran led govt but not very suprising from U turn specialist...
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Oct 30, 2019 09:12pm
@abood, O Bhai 100million ka 0.5% 0.5 million, meaning 500000 banta hai. And remember this 10million is not profit, its turn over. Profit may be 1/10th of that
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Oct 30, 2019 09:19pm
Traders are looters as they evade taxes. Investigate their assets and
sources of income. No rocket science required.
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Oct 30, 2019 09:33pm
Why govt waits for strikes to approach any committee to talk to them eg business community, doctors, transport union etc etc. They are setting examples and until you don't go on strike we will not talk with you.
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Oct 30, 2019 09:51pm
The saddest part of this story, and for that matter situation in any other country, is that only people who pay their share of taxes are the salaried people. Payroll taxes are cut at the source. The organized sector with some detailed account of salaries and revenues, is a small part of the entire economy in any third world country. They have few opportunities to hide their income. And yet, we hope these salaried employees to pay for the service rendered to the rest of the society. Talk of inequities. No wonder corruption and tax evasion through undeclared income has become a part of the culture.
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Oct 30, 2019 09:59pm
@Ali Turi, not sure how to make people understand that...
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Oct 30, 2019 10:11pm
Good luck to tax authorities. It's going to be long fight to bring all in tax network. First of all FBR must control the corruption in their departments. If they are successful in this cleansing exercise than others will be automatically achievable
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Oct 30, 2019 10:32pm
@fahimkhalil, honest comment, actual roots of economic degrading
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Oct 30, 2019 10:34pm
Government has again shown weakness. Giving up 60 percent of tax. Needs to show more backbone. At the moment wilting at every challenge.
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Oct 30, 2019 10:41pm
The Parliamentarians must pay Tax first.
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Oct 30, 2019 10:43pm
Who messed up the economy ?
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Oct 30, 2019 10:46pm
How did the Trade Gap increase from minimum to US$ 35 Billion ? Why didn't the successive governments try to resolve this issue earlier ?
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Oct 30, 2019 10:51pm
How did the Imports increase from UD$ 25 Billion to US $ 60 Billion in just a few years ? Do we really need to import all these things ?
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Oct 30, 2019 11:16pm
Something is better than nothing
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Oct 30, 2019 11:18pm
Did I read it right that the tax rate in Pakistan on business is going to be .05%! Must be the lowest tax rate anywhere in the world. At this rate, we will have to continue to borrow to servive.
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Oct 30, 2019 11:29pm
Too little too late...
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Oct 30, 2019 11:37pm
Simple Maths Traders Earn more pay more taxes! Pakistan can not run on only salaried persons tax money. Govt must tight and bring all traders on tax net!
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Oct 30, 2019 11:38pm
Ban all vendors. They have to act responsibly
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Oct 30, 2019 11:44pm
What's IK's government's strategy? Saying one thing and then changing the stance completely. It happened way too many times.
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Oct 31, 2019 12:19am
The positive power of democracy... An excellent result.
Gordon D. Walker
Canada
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Oct 31, 2019 02:58am
Those who are complaining that salaried people pay taxes. Most of employed Govt.s people are incompetent, do not even work full work day, or got the job by illegal means. Sometimes I agree that to pay tax for what while already there is indirect taxation? Simple definition of tax is that "You pay for the services you get to facilitate what is in place". Do we get anything? Education? Health? Social Benefits?
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Oct 31, 2019 02:46pm
Squeeze the politicians and influentials, not the public only ....
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Oct 31, 2019 05:59pm
@Testing times, it's not about folding, rather in our society we like to haggle so the government started off at a higher rate knowing fully well the behaviour of the traders, so once they came to the negotiating table then the actual numbers were agreed upon. The benefit of this is in a number of years the traders who are not paying their tax due can be more easily targeted for investigation. what Pakistan really requires is a dedicated department to root out monopolies and anti competition in the markets especially the food market, with hoarding and control by a few is causing food inflation to skyrocket.
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Oct 31, 2019 10:10pm
Actions speak louder than words. The policies of the government are not in favor of businesses, excessive taxes, high inflation, and slow growth are not good for economic activity.
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