Small traders have strongly rejected the newly announced fixed tax scheme, describing it as unfair and claiming it primarily benefits large businesses while placing additional pressure on genuine small traders.
Mehmood Hamid, President of the All Pakistan Organisation of Small Traders and Cottage Industries Karachi, criticized the scheme unveiled by Finance Minister Muhammad Aurangzeb and Minister of State for Finance Bilal Azhar Kayani, arguing that it reflects inconsistencies in the government’s taxation policies.
According to Hamid, the initiative has been presented as a relief measure for small traders but, in reality, could provide significant concessions to larger businesses operating under the guise of small enterprises.
He stated that the government continues to express concerns over missing revenue targets despite collecting substantial amounts through indirect taxes and levies. He argued that excessive reliance on such measures has increased the burden on businesses and consumers while contributing to economic difficulties.
Concerns Over Eligibility Criteria
Hamid questioned the classification of businesses with annual turnovers ranging from Rs20 crore to Rs25 crore as small traders. He maintained that enterprises operating at such scales, often with multiple branches and advanced retail systems, cannot be considered small businesses.
He further criticized the proposal allowing traders paying a fixed annual tax of Rs25,000 to be exempt from Point of Sale (POS) requirements, claiming that the measure could significantly reduce tax liabilities for larger retailers previously subject to digital sales monitoring.
According to him, the policy risks creating opportunities for tax avoidance while shifting enforcement efforts toward smaller traders with limited resources.
Demand for Fair Taxation
The traders’ representative emphasized that the business community is not opposed to taxation but seeks a fair and transparent tax system that treats all taxpayers equally.
He alleged that current policies provide undue advantages to tax evaders while compliant taxpayers continue to face increasing scrutiny and compliance costs.
Hamid warned that any attempt to use the scheme as a basis for additional enforcement actions against small traders could further strain relations between the business community and the government.
Calls for Policy Review
The organization urged the government to revisit the proposed framework and ensure that tax reforms focus on broadening the tax base rather than providing concessions to larger businesses.
Hamid maintained that policies perceived as protecting tax dodgers could undermine confidence in the tax system and weaken efforts to improve voluntary compliance.
He concluded that sustainable revenue growth can only be achieved through equitable taxation policies, transparent enforcement and measures that encourage trust between taxpayers and the state.
