The Chainstore Association of Pakistan (CAP) has announced to resist the new taxation measures which it said will add to the miseries of traders, who are already coping with a serious financial crisis. CAP Chairman Rana Tariq Mehboob observed that the new taxation measures would jolt the very basis of the trade and industry, as the newly introduced taxes would further erode the purchasing power of consumers, which would ultimately hit the manufacturing sector hard. “It will be better if the government takes measures to expand the tax net instead of introducing new taxes for the already taxed segments of the society,” he said.

He said that the prices of petroleum products had already gone through the roof, hitting hard the lower-middle class. Criticising the one per cent sales tax increase, he said it had been the tradition of the government to overburden the handful of taxpayers over and over instead of expanding its tax net. “Only tier-one retailers are paying the tax in big cities, which has robbed the formal sector of competitiveness and a level-playing field,” he pointed out.

Rana Tariq Mehboob warned that skyrocketing inflation, unprecedented rupee depreciation, high energy tariffs, escalating markup rates, rising commodity prices, fluctuating exchange-rate and balance-of-payment crisis would lead to further hike in headline inflation, taking a toll on the economy.

“Due to serious and critical imbalances threatening the country’s economic viability, Pakistan cannot afford to roll out monetary and fiscal policies to achieve over 4% economic growth rate in FY2023-24,” he said, adding energy rates and the effect of reduced market times were the added miseries for them. He demanded that the government formulate long-term sustainable economic policies. Commenting on the levy collected on the point of sales, he said nothing was being returned as pledged by the government.

Tariq Mehboob proposed to stop charging the consumers if the return was not assured. The CAP chairman also demanded easing restrictions on the import of raw materials. He said inflationary pressure was expected to continue in coming months as electricity base tariff hike and gas price revision had yet to reflect in CPI numbers, while sharp rupee depreciation would also add to inflationary pressures. He said it had now been proved that the State Bank of Pakistan’s tight monetary policy had no effect on the prices of food items that were increasing because of supply shocks, increase in sales tax rates and monopoly of few businesses.

Rana Tariq Mehboob warned that rising inflation could hurt economic growth and that a careful policy was required to curb it. He said the pace of inflation was skyrocketing at a time when the economic activity was slowing down, which has made it difficult for the people to make both ends meet. He said the country was facing stagflation because the economic growth rate was slow while unemployment and prices of goods and services were high.

The CAP chairman said the present situation indicated the complete breakdown of administration. He demanded that the central bank take concrete steps to help stabilise the currency as businesses and industrial activities were badly affected. The government has so far not rolled out the much-needed strategy or a contingency plan to safeguard the interests of the country and its people, he regretted.

Credit: Independent News Pakistan-WealthPk