LAHORE: The Chainstores Association of Pakistan (CAP) on Monday announced its decision to resist the IMF pressure, as the new taxation measures would add to the miseries of the traders who are already coping with a serious financial crisis.

CAP Chairman Rana Tariq Mehboob said that increase in general sales tax to 18% in the new proposed Finance Bill will increase the difficulties of the traders who are facing serious financial crisis.

In a statement issued here, the CAP chairman said that the newly-introduced taxes would bring down the purchase power of the consumer. He observed that it would ultimately hit the manufacturing sector very badly.

“It would be better if the government takes measures to give expansion to the tax net instead of introducing new taxes for the already taxed segments of the society,” he said.

While crriticising the one percent sales tax increase, he said it had been the tradition of the government to axe the handful of tax payers 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.

Under the domino effect of dollarisation, the skyrocketing inflation, which is already in the midst of a decade-high level, along with the unprecedented rupee depreciation, high energy tariffs, escalating markup rate, rising commodity prices, fluctuating exchange rate and balance-of-payment crisis, will lead to further hike in headline inflation, taking a toll on the local economy, he warned.

He demanded that State Bank of Pakistan should take concrete steps to stabilize the currency as businesses and industrial activities are badly affected.

Copyright Business Recorder, 2023