Traders on strike across Pakistan over new IMF-proposed taxes

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Pakistani labourers speak on a mobile phone in a shuttered market during a traders countrywide strike against the prices hike, in Lahore on July 13, 2019. (AFP)
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A wholesale market located in Bolton Market is photographed with shutters down during a strike called by traders against what they say is a harsh federal budget for the fiscal year 2019-20 and imposition of taxes by the Federal Board of Revenue (FBR) in Karachi, Pakistan July 13, 2019. (Photo AN)
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Wholesale shops located in Bolton Market photographed with shutters down during a strike called by traders and the business community against what they say is a harsh federal budget for the fiscal year 2019-20 and imposition of taxes by the Federal Board of Revenue (FBR) in Karachi, Pakistan July 13, 2019. (Photo AN)
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A hardware market on Karachi’s MA Jinnah Road is closed during a shutter down strike called by the business community against what they say is a harsh federal budget for the fiscal year 2019-20, and imposition of new taxes by the Federal Board of Revenue (FBR) in Karachi, Pakistan July 13, 2019. (Photo AN)
Updated 15 July 2019

Traders on strike across Pakistan over new IMF-proposed taxes

  • Almost 90% wholesale markets remained shut in Karachi, strikes in Islamabad, Rawalpindi, Lahore, and Multan
  • Protests underline pressures on government which has had to impose strict austerity measures to bolster public finances

KARACHI: Markets and wholesale merchants across Pakistan remained shut on Saturday in a strike against what traders have called ‘unjustified measures’ taken in the federal budget announced by the government last month, ostensibly as part of prior actions prescribed by the International Monetary Fund’s recent $6 billion bailout package.
While not all business associations joined the strike, the shutdown highlights the pressures facing Prime Minister Imran Khan’s government, which came to power last year promising millions of new jobs and welfare measures to help the poor. Instead, it is having to impose tough austerity measures after being forced to turn to the IMF.
Kashif Chaudhry, the president of the Markazi Tanzeem-e-Tajran Pakistan (Central Organization of Traders), called the strike a “historical” one, saying markets were closed from the northwestern Khyber Pakhtunkhwa province all the way to Karachi, the capital of the southern Sindh province.
“Closure [of markets] on a single day costs the country Rs4 billion only in the city of Karachi,” said Atiq Mir, chairman of the Karachi Tajir Itehad, an umbrella group of the city’s trade associations. “Accumulated losses would be around Rs50 billion across the country.”
Traders say they are striking against a complex new system of value added taxes, discretionary powers of tax officials, a complicated income tax system and unreal tax rates. Under the measures proposed by the IMF, the government has also agreed to close loopholes and preferential rates in sales tax on sugar, steel, edible oils and medium and large retailers, hitting many businesses.
Traders are also protesting a new condition imposed by the government that customers who spend more than Rs50,000 will have to present National Identity cards.
Shabbar Zaidi, the chairman of the Federal Board of Revenue, Pakistan’s main tax collecting agency, said on Friday the condition to present ID cards would help the government identify tax dodgers in a nation where less than 1 percent of the population of 208 million even files income tax returns.
Responding to the protests, de facto information minister Firdous Ashiq Awan said the government was ready for negotiations and considered traders its partners, but warned those who were protesting due to a “political agenda.”
“We have no political ambitions, our cause is only the traders’ cause,” Kashif Chaudhry of the Markazi Tanzeem-e-Tajran Pakistan said. “We have offered talks many times and we are still ready to talk.”
Traders in Karachi, the main commercial hub of the country, said 90 percent of the city’s wholesale markets were closed, causing the city billions in losses.
Similar strikes were called in other big business centers including the eastern city of Lahore, Rawalpindi, near the capital Islamabad, and Multan, home to a major ceramics industry.


Pakistan to be part of new Saudi foreign manpower program 

Updated 14 November 2019

Pakistan to be part of new Saudi foreign manpower program 

  • New skills-based system to be launched from next month
  • Will include India, Philippines, Sri Lanka, Indonesia, Egypt, Bangladesh, and Pakistan

ISLAMABAD: Starting next month, Saudi Arabia will introduce a new skilled foreign manpower program that will eventually include Pakistan, a senior official at the Saudi labor ministry said this week. 

Nayef Al-Omair, head of the vocational examination program at the Ministry of Labor, said on Tuesday in Riyadh that the ministry was categorizing the tasks and the structure of some professions for visa-issuing purposes.

Under the new policy, visas would be issued only after skill tests and the previous system would be gradually phased out. 

The new scheme would be optional for one year starting December 2019 after which it would become compulsory, Al-Omair said. The new program would first be applied to manpower recruited from India due to its large size in the Saudi market.

Eventually, the program will cover seven countries, including India, the Philippines, Sri Lanka, Indonesia, Egypt, Bangladesh, and Pakistan. Workers belonging to these states constitute 95 percent of professional manpower in the Kingdom’s local market.

Saudi Arabia is home to around 2.6 million Pakistani expats those have been a vital source of foreign remittances.

Last year the country received $21.8 billion in remittances out of which $5 billion were remitted by Pakistani nationals working in Kingdom.

According to the Pakistani ministry of finance, there was a major decline in manpower export to Saudi Arabia where only 100,910 emigrants proceeded for employment in 2018 as compared to 2017, a drop of 42,453 emigrants.

However, Sayed Zulfikar Bukhari, special assistant to the Pakistani prime minister on overseas Pakistanis, said in an interview earlier this month that Saudi Arabia had agreed to increase the share of the Pakistani labor force in the multi-billion dollar New Taif City development.

Pakistan and Saudi Arabia have formed working groups to develop procedures for this transfer of manpower. Pakistani groups will visit the Kingdom in the coming months to finalize arrangements.