HYDERABAD: The President of the Hyderabad Chamber of Small Traders and Small Industry, Muhammad Saleem Memon, while expressing his reaction to the fixed tax and turnover tax proposals being considered by the federal government in the budget for the upcoming fiscal year, has said that documenting the economy, expanding the tax net and simplifying the tax system are the need of the hour. However, the ground realities of small traders, shopkeepers and low-profit businesses should not be ignored in the formulation and implementation of any new tax policy.
He said that small traders across Pakistan are already facing expensive electricity, gas, rising rents, bank markups, business expenses, weak purchasing power and continuous economic slowdown.
In such circumstances, it was not at all appropriate to put additional financial burden on small traders.
Saleem Memon said that if the government really wanted to expand the tax net, it should take into account the ground realities. The nature, investment, expenses and profit rate of a grocery store, clothing store, medical store, bookstore, hardware shop, small industrialist and service sector business were not the same. So imposing the same fixed tax or turnover tax on all was against the requirements of justice.
He wondered if the government had examined the real income and profit of millions of small traders who had been struggling to maintain their businesses?
It was not appropriate to impose tax based only on turnover because turnover was not profit.
There were many businesses whose business volume was high, but the profit was very limited. In such a situation, imposing tax at a uniform rate could create serious problems for small and medium businesses.
The HCSTSI president demanded of the government to clearly classify small, medium and large businesses and formulate a separate tax policy according to the nature of each sector. A small shop in a locality cannot be considered equal to a large retail chain, shopping mall or corporate entity. Before implementing a fixed tax, the size of the business, capital, profit, number of employees and geographical conditions should also be taken into account.
He said that the Hyderabad Chamber of Small Traders and Small Industry had always supported simplicity, transparency and documentation of the tax system.
The Hyderabad Chamber, while regularly participating in meetings related to various budgets, tax reforms and business policies held at the federal and provincial levels, had also put forward several practical suggestions so that the tax net was expanded and business activities were not affected.
However, any step that would put the already struggling small traders and business community under further pressure could not be acceptable.
He urged the government, the ministry of finance and the FBR to hold extensive consultations with chambers, trade organizations and other stakeholders before finalizing the proposed scheme so that a balanced, fair and business-friendly system could be created that would increase government revenues as well as contribute to business development and employment.
He said that if business expands, taxes would also increase, but if business came under pressure, the economy, employment and government revenues would all be affected.
Copyright Business Recorder, 2026
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