• Business community warns of escalation as govt fails to meet tax reform demands
• Islamabad, Rawalpindi and a few other cities remain normal

KARACHI/LAHORE/ISLAMABAD: Karachi and Lahore — Pakistan’s two largest commercial cities — witnessed a near-complete shutdown on Saturday as traders observed a strike against what they described as harsh and anti-business taxation measures introduced through the Finance Act 2025-26.

The strike, called by the Karachi and Lahore Chambers of Commerce and Industry, marked one of the most widespread protests by the business community in recent years.

In Karachi, nearly 90 per cent of commercial activity remained suspended, including wholesale markets, retail shops, industries, and fruit and vegetable markets. KCCI President Jawed Bilwani told Dawn that this was the first time in the chamber’s history that the city’s entire business community had voluntarily shut down operations in protest.

Mr Bilwani said industrial production had come to a halt in all seven industrial zones, while no export consignments were sent to the port. Goods transporters also suspended operations, halting the movement of imported raw materials and finished goods. While Karachi Port Trust (KPT) officials claimed port operations remained unaffected, they could not confirm the flow of consignments to and from industries.

He said the economic cost of the strike could be gauged from Karachi’s significant contribution — around 70pc of federal tax revenues and 54pc of national exports.

Explaining the choice of Saturday for the strike, Mr Bilwani said the decision was taken unanimously by stakeholders, despite the usual weekend closures in multinational and large private companies. He stressed the strike was not a rebellious act but a last resort following repeated government inaction.

Among the business community’s core demands are the immediate suspension of Sections 37A and 37B of the Sales Tax Act — provisions that allow for the arrest and prosecution of taxpayers without due process. Other demands include the withdrawal of Section 21(s), which penalises cash-based transactions, and the restoration of the Final Tax Regime for exporters.

Mr Bilwani said these concerns were shared in detail with a committee led by Special Assistant to the Prime Minister (SAPM) on Finance Haroon Akhtar Khan, but only verbal assurances were received. “Frustration has reached a boiling point,” he warned, adding that failure to receive written assurances or progress by next week would prompt further nationwide consultations on future actions.

He expressed appreciation for the unity shown by the seven town associations of Karachi and other trade bodies including the PHMA, Knitwear Exporters, Electronic Dealers, and Petroleum Dealers Associations. He also thanked chambers from other cities for their solidarity.

Complete shutdown in Lahore

Lahore also witnessed a widespread shutdown, with traders from major markets strongly protesting against the new taxation regime and expanded FBR powers. Despite the FPCCI’s announcement of strike withdrawal, major Lahore markets observed a complete closure in support of the LCCI’s call.

Closed markets included Shah Alam Market, Hall Road, Urdu Bazaar, Anarkali, Azam Cloth Market and many others. Some markets, like Abid Market, remained partially open. Traders vowed to continue protests until their charter of demands is met.

LCCI President Mian Abuzar Shad called the strike a historic show of unity and resistance. “July 19 will go down as a defining day in the struggle for economic justice,” he said at a press conference.

“We have been left with no option but to protest either through shutdown strikes or rallies. And we will continue it till acceptance of our charter of demands,” commented a trader. “We will not surrender, and the government must listen to this well,” he warned.

Mr Shad noted that Lahore and Karachi together represent over 60pc of Pakistan’s economy. “Today, that 60pc was silenced by choice — not force — to send a clear message to the government,” he said.

He revealed that the LCCI held nearly eight hours of virtual talks with senior government officials, including SAPM Haroon Akhtar, FBR Chairman Rashid Langrial and others, but no written commitment was offered. The chamber had sought urgent revisions to Sections 37A/B, the e-invoicing and e-Bilty systems, the 16pc sales tax on property rent, and 20pc tax on transactions above Rs200,000.

Twin cities remain open

In contrast, business activity remained unaffected in Islamabad and Rawalpindi, where markets continued to operate as usual. Islamabad Chamber of Commerce and Industry President Nasir Qureshi stated that the chamber had chosen to wait for the outcome of the recent assurances given by SAPM Haroon Akhtar.

Ajmal Baloch, President of the All Pakistan Anjuman Tajiran, announced a nationwide protest campaign starting with demonstrations on July 26, followed by phased strike actions if their demands were not addressed.

He criticised the bureaucracy, accusing it of misleading the government and warned of intensifying protests if the new FBR powers are not revoked.

Published in Dawn, July 20th, 2025