Small traders take out rally against Vat


Farhan Zaheer May 07, 2010

KARACHI: Small traders and businessmen on Thursday staged a protest, asking the government not to impose value added tax.

Taking out a rally in the evening at M A Jinnah Road, one of the busiest roads of the country’s financial hub Karachi, representatives of different trade associations announced that all small traders, shopkeepers and businessmen were opposing the new 16 per cent tax, which would be imposed from July 1 this year replacing the 15 per cent general sales tax. “We have come on roads because we believe that Vat will cause immense problems for the traders.

Vat allows double taxation, creating difficulties for the traders,” said Atiq Mir, President Arambagh Furniture Association and leader of the All Karachi Tajir Ittehad, who led the protest. “Vat is a problem for businessmen as they have documented businesses unlike us. Small traders and retailers are mostly illiterate and are part of a big undocumented economy,” Mir said. When asked why the traders are against the documentation of the economy, Mir replied that they were not against it. “The problem with Vat is its high rate.

Traders are against the high rate which is not only difficult but also higher than the general sales tax (GST),” he added. He said Vat is good for industrialised countries where social welfare system pays back to their citizens. In countries like Pakistan where the government is unable to provide health and educational facilities, Vat is a burden on the taxpayer, he said. Small traders and businessmen were divided on the issue of value added tax.

“One group is protesting against Vat on roads and the other is still in negotiations with the government,” said Siddiq Memon, Chairman Traders Action Committee (TAC). “I was at the Karachi Chamber of Commerce and Industry (KCCI) on Thursday evening representing TAC. We did not support the protest,” he added. Anis Majeed, President Karachi Tajir Ittehad, said “we did not take part in Thursday’s protest. Traders who support our stance attended a meeting at the KCCI at the same time when others were staging a protest.”

“We want to negotiate with the government from the KCCI platform. At least for now we are not staging any protest against Vat,” Majeed added. Tajuddin, President Bolton Market Traders Group, said that all traders were against Vat whether they were protesting or not. “We support the protest against Vat. What will the government give us in return for the Vat,” he asked. “Traders had not expected this attitude from a democratic government,” he added.

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