Deadlock ends between govt, traders after agreement reached on CNIC condition


The government and traders reached an agreement on Wednesday to end the deadlock and deferred the condition to show CNICs on sales and purchases till January 31, 2020.

Earlier today, the Federal Board of Revenue (FBR) had drafted a fixed tax scheme for traders amid efforts to end the ongoing deadlock between the country’s retail sector and the government.

The draft of the new tax scheme was discussed in a meeting with businessmen and the session was presided by Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh.

Shaikh had expressed hope that all matters will be sorted out today.

“We want businessmen to be happy and fulfil government’s objective as well,” he had said.

Traders’ spokesperson Kashif Chaudhry asked the government to reduce the turnover tax from 1.5 per cent to 0.5 per cent. He also expressed hope that traders won’t be asked for sales tax registration and won’t allow them to become withholding agents.

The traders began their two-day strike on Tuesday against tax measures introduced by the FBR.

The protestors demanded the government to rescind its decision to show CNIC on purchase of Rs50,000 or more. They are also against getting registered for sales tax and have sought a fixed tax scheme.

In Tuesday’s negotiations, the tax authorities refused to accept demands for the withdrawal of CNIC condition and charging a nominal fixed income tax from big traders.

The talks failed despite the mediation by former Pakistan Tehreek-e-Insaf (PTI) secretary-general Jahangir Tareen, who tried to convince both the sides to show leniency. Tareen, however, hoped that a breakthrough would be achieved on Wednesday (today).

The government that was earlier showing some flexibility had to take a firm stance after the International Monetary Fund (IMF) opposed the idea of charging fixed income tax from the traders, according to the sources in the Ministry of Finance.

FBR Chairman Shabbar Zaidi told The Express Tribune, “I cannot accept the demands of withdrawing the CNIC condition and charging income tax on the turnover basis from medium and large-sized retailers.”

However, he said he was ready to offer fixed income tax rate only for small shopkeepers. A shopkeeper doing business in a 2,000 square feet shop could not be charged under the fixed regime, he added.

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