Traders considering deducting protection money from their income taxes

This Ramazan was especially hard for the business community.

KARACHI: The city’s business community ends up paying Rs15 million to extortionists every day, and this form of “double taxation” has to end, argued the city’s main body, the All Karachi Tajir Ittehad.

The Ittehad’s chairman, Atiq Mir, said that traders would start submitting “extortion slips” along with their official tax returns to the Federal Board of Revenue and then use them to claim a deduction on their income taxes. “If the situation is not brought under control by September 2013, then we will start deducting the extortion we pay from our income taxes,” said Mir.

While speaking at a recent programme, Mir said that Ramazan was especially hard on the business community this year, as it paid two rupees in extortion for every rupee it owed the government in taxes in the month. “We will adjust our tax returns accordingly if the government does not allow us address the issue.”

Mir added that over 30,000 traders had been forced to move their businesses outside the city due to the menace of extortion, and that the number could reach 50,000 by the end of the year if the government failed to address the problem.

Blocking illegal SIMs

Both the government and the business community have seemed to realise the significant role played by cell phones in facilitating extortionists and other criminals. While authorities still have to figure out a way to deal with “e-extortion,” in which criminals coerce people to use e-banking and cell phone credit transfer facilities to pay them.

Former interior minister Rehman Malik had recently created quite a stir when he announced that millions of prepaid SIMs would be deactivated. However, he later clarified that only SIMs that were registered on “fake identities” will be blocked.

Mir was also cautious in response to the government’s decision to deactivate millions of illegal prepaid SIM cards in the country. He said that traders had been asking authorities to take action against “illegal” SIMs, but the government ended up taking a sweeping action against 100 million prepaid SIM cards, which ended up hurting the business community.

The government had also directed cell phone service companies to stop providing cellular services throughout the country on the eve of Eidul Fitr. The services were restored around noon on the first day of Eid.

“Law enforcement agencies should spend some time and scrutinise records, and then block those SIMs” that are being used for nefarious purposes like kidnapping for ransom or extorting money,” said Mir.

Published in The Express Tribune, August 29^th, 2012.