KARACHI: Prime Minister Imran Khan on Wednesday rejected the traders’ demand of withdrawing CNIC condition for sale and purchase activities.

During a marathon meeting with the business community at the Governor House, PM Khan said trading activities would no longer run on old pattern.

Meanwhile, the business community expressed its dismay after listening to the prime minister’s views which were also seconded by Economic Adviser to PM, Dr Abdul Hafeez Sheikh and Chairman Federal Board of Revenue (FBR) Shabbar Zaidi.

Sheikh expressed surprise as to why traders had been avoiding paying taxes. “The government will not compromise on this and everybody has to pay tax,” he said.

Former president Karachi Chamber of Commerce and Industry (KCCI) Zubair Motiwala said the issue of 17-20 per cent sales tax on textile sector and CNIC condition would be discussed at length at a meeting to be held on Friday with businessmen.

Auto sector demands find little traction, builders bemoan property valuations

He said the business community also discussed issues related to budget anomalies under which duty impact on machinery had increased, while additional custom duty on imports was raised from 2-4pc, followed by 5pc income tax on electricity.

He added that the prime minister had also asked Adviser on Production and Industries, Abdul Razak Dawood to resolve the problems being faced by the textile industry.

However, the finance adviser was quite adamant that fundamental changes in the budget cannot be made.

Motiwala said the chairman FBR had informed the meeting that he had been in touch with businessmen and is working on different modalities to improve business environment and boost exports.

He added that PM Khan had asked the businessmen to support government’s policies and become its partners.

Dismal cars sales mar auto sector: Meanwhile, the auto sector representatives who attended the meeting said they took up the issues of high taxes and duties imposed in the Budget 2019-20 which pushed up prices of vehicles.

They informed the prime minister that the first 10 days of the current month had remained dismal in terms of car sales owing to high prices triggered by imposition of FED, rupee devaluation against the dollar, 5pc additional custom duty etc.

On FED and additional customs duty, Shaikh said that these taxes and duties were imposed on other sectors too and the government would analyse its overall impact in coming months.

However, the auto sector representatives said that they confused how the government would get extra revenues when additional taxes and duties are bound to hit vehicles’ sales badly.

Senior Vice President FPCCI, Mirza Ikhtiar Baig said more than 100,000 non-filers had registered in the amnesty scheme and now these (filers) must be treated without harassment to encourage other non-filers looking to join tax net.

On withdrawal of zero-rated facility for five export oriented sectors, he informed the PM that it was ensure by finance adviser and chairman FBR that the sales tax refunds to the exporters to be made at the time of receiving export proceeds in the bank with auto generation of refund vouchers by the banks, but no such mechanism has been announced yet.

In the meeting, Chairman Association of Builders and Developers (ABAD), Mohammad Hassan Bakhshi urged the prime minister to rationalise valuation rates of property in Karachi, Hyderabad and Lahore. PM agreed to look into the issue.

Bakhshi said he informed PM Khan about soaring cost of construction materials including steel bars and cement. He urged the prime minster to issue orders to the Competition Commission of Pakistan to conduct an enquiry against the cartelisation in steel and cement sectors.

The ABAD chief also asked PM Khan to allow builders to sell their units to overseas Pakistanis in US dollars and sale proceeds would be credited through banking channels. Dollars earned by builders can be used for importing steel and other construction materials without paying duties by the builders and developers, he added.

He requested the PM that Pakistanis buying first built up property up to price of Rs10 million shall be exempted from wealth reconciliation.

Hassan said he had requested to provide Rs200 billion package to Karachi for infrastructure improvement. The prime minister agreed to look into the matter, he added.

Traders mulling strike

Meanwhile, President Karachi Electronic Dealers Association (KEDA), Mohammad Rizwan Irfan said that the chairman FBR had sidelined the traders’ demand regarding CNIC condition coupled with some other proposals.

The KEDA representatives were unable to meet the prime minister.

Recalling that the Anjuman Tajiran Pakistan had called a countrywide strike on July 13 against the harsh budgetary measures, he said “We will hold the meeting of Karachi Tajir Action Committee on Thursday to decide about supporting or deviating from the strike.”

Published in Dawn, July 11th, 2019