The Governor of Sindh, Imran Ismail, successfully convinced the Karachi Tajir Action Committee (KTAC) to postpone the three-day strike announced by traders in the city until more comprehensive talks with the government are completed. The 11-point agenda of the KTAC demands a rollback of many important measures introduced by the government in the budget, include provisions to register the transactions of Rs50000 and above through obtaining National Identity Cards (NIC) of the buyers, a reduction of the turnover tax and restoring tax exemptions to incomes of Rs1.2 million per annum.

The government has already attempted to facilitate the ease of doing business in the country, and the tax amnesty scheme was a major olive branch extended to traders across the country in a bid to bring more into the tax net. Now that the extended deadline of the scheme has passed, providing more concessions to the business community in the country would not be wise. Documentation of sales and widening the tax net are fundamental steps that the government must take if the country is to head down a path of stability and the traders’ demands on these issues should not be entertained.

Claiming further concessions at a time when the government has already gone from pillar to post in establishing that it has the business community’s best interests heart reflects the traders’ belief that they can strong arm the government into giving them what they want. We have seen all of this before during previous governments as well; the state looks to try and get the business community to give back to the country in the form of increased taxes and more transparent transactions, and then gets pushed back through the threat of strikes or other forms of agitation.

Showing leniency now or looking to compromise will only weaken the government’s position and set a negative precedent for tax collection in the country; businesses need to be taxed as well. If the government gives the traders what they want, each time the state will look to get more out of them, we will see the threat of street protests derail any efforts to increase state revenue. The economic downturn has hit the entire country hard; the traders should be no exception. The sooner they come to terms with this reality, the better. It is hoped that Governor Sindh’s plans to orchestrate a meeting between the traders and the Prime Minister only helps the government in making the former realise that all these measures are imperative to improving the economy. We cannot afford another situation where the government just caves to the irresponsible demands of the traders.