Different stakeholders, different voices, different opinions. The traders’ strike and its resolution is not a cut-and-dried win-win situation that is being splashed around. Together, the picture appears convoluted with each participant appearing a bit lost as regards the result.

What the association says

Viewed through the association’s lenses, the victory lies entirely with the traders. “We never had an issue with the CNIC condition. We give our CNIC a hundred times for cheques at banks etc, why would we have an issue with it?” said the president of All-Pakistan Anjuman Tajiran Ajmal Baloch.

The heart of the tussle was the sales tax registration, linked with the CNIC requirement, which the government has done away with entirely, he asserted. “We are not educated; we need a ‘technical babu’ to fill out the dozen sales tax return forms who cost Rs15,000-20,000 a month. What is the sense in paying Rs250,000 a year for such a resource when we end up filing zero-rated tax?”

‘If the government had continued to pressurise traders, I think we would have broken rank. At the end of the day, we are all rivals’

The three-month extension is for the government to go back to the International Monetary Fund and explain to the West that their level of education is vastly different from ours; they work on computers, we keep cash in iron drawers, explained Mr Baloch. Therefore, we cannot comply with their requirements.

He refuted the claim that the Azadi March had anything to do with the government softening its stance. “How can you have a freedom march within your own country? It’s a pointless exercise; people will give speeches and go home. It has no bearing on the traders’ strike and the government’s resolution.”

What the government says So has the government done away with sales tax registration?

The press conference by finance advisor Hafeez Sheikh would suggest otherwise. While the rate of tax for traders has been tweaked and electricity bill requirement for sales tax registration has been increased from Rs600,000 to Rs1.2m, the CNIC-based documentation drive was postponed for three months.

When asked whether the government had accepted the traders’ demand of doing away with sales tax registration, the Federal Board of Revenue chief Shabbar Zaidi remained quiet on the subject though he replied promptly when questioned about the Azadi March effect on the negotiations. Similarly to Mr Baloch, Mr Zaidi denied allegations of Maulana Fazulur Rehman having any impact on the process. On this at least both sides are on the same page, even if just for the sake of face-saving.

“I thank the leaders of the traders’ community in their support of the government in her efforts for documentation of the economy. It is essential that a complete trail of transactions be documented for proper implementation of transparent fiscal policies. This principle has been accepted,” said a tweet by Mr Zaidi which would imply that the traders accepted the documentation drive.

Given Mr Baloch’s statement that CNIC is pointless without sales tax registration, how exactly are the traders going to be documented is anyone’s guess. Possibly, if the entire exercise had been delayed after the Azadi March hubbub had died down, the results could have been more fruitful rather than confused.

What the traders say

“If the government had continued to pressurise traders, we would have broken rank I think. If even one shop is open in the market, the customers will give all its business to it which disincentivises others to keep their shutter down. At the end of the day, we are all rivals,” explained one trader calling out different markets and shops in Karachi that had remained open despite the strike.

“Last week I was at customs from 11 am to 6 pm to file a WeBoc return,” narrated another trader. Even though his lawyer had looked over the documentation and assured him it was complete, he was unable to have the paperwork processed.

Eventually, the official he was dealing with gestured with his hand and exasperated, the trader asked how much money it would take to get the job done. “I paid Rs320,00 as ‘token’ money on direct taxes of Rs4.9 million,” he said, lamenting the increase in bribes since the documentation drive. “Since the risk of accepting bribes is higher, the officials ask a higher amount of money to get any job done,” he said.

Though traders agree that documentation is necessary, corruption makes even the most honest wary. The general perception is that the Azadi march weakened the government’s resolve but that it will eventually tighten the screws.

If the FBR is to be believed, then another step towards documentation has been taken. If the association is to be believed, then it is the government that has conceded to the traders’ demand.

Meanwhile, the traders remain mired in obstacles created by the corruption that has seeped into the infrastructure’s bones, wondering how much more they will have to pay in ‘token’ money as the government marches on it with its ill-timed ill-planned activities.

Published in Dawn, The Business and Finance Weekly, November 4th, 2019