Traders seek 0.5pc turnover tax before budget

A traders’ coalition has urged the government to reduce the turnover tax to 0.5pc before the federal budget. At a press conference in Islamabad, its leaders also sought customs reforms, tax exemptions for affected provinces and an investment amnesty scheme.

ISLAMABAD: A coalition of traders on Saturday called for the turnover tax to be brought down to 0.5 per cent ahead of the federal budget, saying businesses were already under strain from difficult economic conditions.

Addressing a press conference at the National Press Club, All Pakistan Anjuman-i-Tajiran and Traders Action Committee President Ajmal Baloch said the proposed turnover tax arrangement was a positive step that could shield traders from what he described as corruption and blackmail. He also praised Prime Minister’s Adviser on Finance Bilal Azhar Kiani and his team for pursuing changes in tax collection.

Baloch said discussions with representatives of small traders had continued for nearly one and a half months and had largely produced encouraging results. He said the easy tax scheme, if implemented, would help improve revenue collection while also protecting traders from problems created by the Federal Board of Revenue.

Speaking about the proposed framework, he said its inclusion in a long-term policy structure would have broad and beneficial effects. He also pressed for a lower turnover tax rate, arguing that a reduced rate would support business activity and raise overall turnover.

At the same press conference, Baloch urged Prime Minister Shehbaz Sharif to introduce comparable reforms in customs. He alleged that customs authorities had created serious problems for traders by keeping legitimate consignments held up for months, causing losses to businesses as well as the national exchequer.

He said traders had also been affected by international circumstances, while high electricity, petrol and gas prices had further damaged commercial activity. Criticising what he called forceful tax recovery practices, he said taxation had often been turned into a means of pressure.

Attributing the remarks to Baloch, he also alleged irregularities in the Point of Sale system and called for inquiries into the assets of FBR officers, along with the removal of officers holding dual nationality. Referring to vehicles seized by customs authorities during the past three years, he asked the prime minister to order an investigation into who was using those vehicles.

Baloch further demanded that small jewellers be brought into the turnover tax scheme, saying its implementation would remove the need for POS systems. He also urged the government to take steps to expand business activity across the country.

Concerns from provinces

All Pakistan Anjuman-i-Tajiran Punjab and Rawalpindi President Malik Shahid Ghafoor Paracha said trading conditions were extremely weak and that many small traders had left their businesses to drive rickshaws or work for ride-hailing companies. He said inflation had climbed to alarming levels because of rising petroleum prices and added that the petroleum levy had been used by the government to cover budget shortfalls.

Paracha said the turnover tax could be acceptable if its structure remained unchanged for at least three years.

Meanwhile, All Pakistan Anjuman-i-Tajiran Balochistan President Imran Tareen and Khyber Pakhtunkhwa President Malik Mehr Elahi said both provinces had suffered heavily because of terrorism and should therefore receive special tax exemptions. They also alleged that customs officials in Balochistan confiscate goods from roadside points and that the same goods later reappear in markets within days.

Other demands

During the press conference, traders also said investors who had moved their capital abroad were facing difficulties because of international conditions. They urged the government to announce an amnesty scheme to encourage the return of investment to Pakistan and to improve law and order.

The coalition also demanded that the capital value tax paid at the time of purchasing a vehicle should be treated as sufficient, arguing that charging the tax on every transfer was not practical.

In his remarks, Baloch said:

For the first time, serious negotiations were held with representatives of small traders, which largely proved successful after nearly one and a half months of discussions

He also said: