ISLAMABAD - The government on Wednesday accepted traders’ key demands and relaxed for three months the condition of showing CNIC for sale or purchase of anything worth Rs50,000 or above.

Talks between the federal government and traders concluded successfully on Wednesday after a one-and-a-half-day shutter-down strike by the business community throughout the country. Traders ended their strike soon after reaching an 11-point agreement with top economic managers of the country during a meeting at the Finance Ministry.

Adviser to Prime Minister on Finance Abdul Hafeez Shaikh and Federal Board of Revenue Chairman Shabbar Zaidi held talks with the traders. PTI senior leader Jahangir Khan Tareen played a key role in ending the deadlock between the government and the business community.

Later, Shaikh and Zaidi briefed the media about the agreement in the presence of traders. According to the agreement, the government has agreed to delay action for three months on its plan to make it mandatory for traders to show CNIC before buying or selling anything worth Rs50,000 or above. According to the agreement, traders with over Rs100 million turnover will pay 0.5 percent turnover tax instead of 1.5 percent. Similarly, traders with annual sales of up to Rs100 million would be excluded from the list of withholding agents.

Only 392,000 of 3.5m businessmen pay tax

Moreover, businessmen and traders consuming electricity worth Rs1.2 million or more per annum will be required to have sales tax registration. Previously, this condition applied to traders consuming electricity worth Rs0.6 million or more per annum.

Under the agreement, the government will determine turnover tax for low-profit sectors in consultation with a committee consisting of traders. The government will reach out to jewellers soon to solve their problems. Similarly, withholding tax on brokers’ licence renewal fees will be reviewed. The government has also agreed to establish a special desk at the Federal Board of Revenue (FBR) in Islamabad to solve traders’ problems. An officer of grade 20 or 21 will be appointed to the desk and he will hold meetings with traders’ representatives on a monthly basis.

A simple form will be created in Urdu language to register new traders and help them file tax returns. As per the agreement, shops smaller than 1,000 square feet will be exempted from sales tax and any decision in this regard will be taken in consultation with the traders’ committee. Any decision on sales tax registration of businessmen doing wholesale business will be taken in consultation with the traders’ committee.

Shaikh said, “We want businessmen to be happy and meet government’s conditions as well.” He told media persons that implementation of the agreement will have a positive effect on the economy. He said that 392,000 traders pay tax, while 3.5 million don’t. He said that traders are major stakeholders and the government would bring them in the tax net. “The government needs more revenue, but it cannot overburden the existing taxpayers. Therefore, people who are not in the net will have to pay tax,” he said.

Zaidi said the government is not scrapping the condition of showing CNIC for sale or purchase of expensive products; it is just relaxing it for three months, until January 2020. FBR would take action against traders if they won’t show CNIC for sale or purchase of anything worth Rs50,000 or more after January next year, he said.

Traders’ representatives praised the government for addressing their concerns and said they would work with the government to strengthen the national economy.

Markets in major cities like Islamabad, Lahore, Rawalpindi and Karachi remained closed on Tuesday and Wednesday. In Islamabad, all major markets like Super, Jinnah Super, Aabpara and Melody remained closed. However, some people opened their shops in the city.