Due to traders’ protests against the government’s new “anti-business” tax policies, Pakistan’s two largest business hubs, Karachi and Lahore, saw a significant shutdown on Saturday. One of the biggest business community protests in recent history is this widespread strike, which was coordinated by the Chambers of Commerce and Industry in both cities.
About 90% of commercial activity in Karachi stopped, including fruit and vegetable markets, industrial operations, and wholesale and retail markets. This was an unprecedented voluntary shutdown by the entire business sector in the city, according to Jawed Bilwani, president of the Karachi Chamber of Commerce and Industry (KCCI). Export shipments to the port were suspended, and industrial production was stopped in all seven industrial zones. The flow of imported raw materials and completed goods was also hampered by the closure of goods carriers. Port officials were unable to verify the movement of goods to and from industries, despite their claims that operations were unaffected. Bilwani emphasized the strike’s economic impact by pointing out Karachi’s substantial economic contribution, pointing out that it generates roughly 70% of federal tax revenues and 54% of all national exports. He clarified that Saturday was chosen due to a unanimous decision by stakeholders, despite weekend closures for large companies, and stressed the strike was a last resort after repeated government inaction.
The immediate suspension of Sections 37A and 37B of the Sales Tax Act, which allow for the arrest and prosecution of taxpayers without due process, is one of the main demands of the business community. Additionally, they want the Final Tax Regime for exporters to be reinstated and Section 21(s), which penalizes cash transactions, to be removed. Bilwani stated that although a government committee was consulted regarding these issues, only verbal guarantees were obtained. He thanked the various trade bodies for their unity and threatened to escalate protests if written assurances or progress were not seen by the next week.
Due to traders’ vehement opposition to the new tax system and the Federal Board of Revenue’s (FBR) increased authority, Lahore also experienced a complete shutdown. Major Lahore markets remained closed in support of the Lahore Chamber of Commerce and Industry (LCCI) even after another trade group announced that it would end the strike. Prominent marketplaces like Shah Alam Market, Hall Road, and Urdu Bazaar were among the impacted areas. Traders promised to keep demonstrating until their demands were fulfilled. Mian Abuzar Shad, president of the LCCI, described the strike as a historic show of solidarity and defiance, pointing out that Lahore and Karachi together account for more than 60% of Pakistan’s GDP. “This silence is a clear message to the government,” he said. Shad disclosed that although LCCI had lengthy virtual discussions with government representatives, no written promises were made. A 16% sales tax on property rent, a 20% tax on transactions over Rs200,000, urgent changes to certain sales tax sections, and e-invoicing and e-bilty systems were all requested by the chamber.
The Chambers of Commerce in Rawalpindi and Islamabad, on the other hand, chose to hold off on doing business until after the government’s Special Assistant to the Prime Minister on Finance provided assurances. Anjuman Tajiran, the president of All Pakistan, declared that if their demands are not met, a nationwide protest campaign will start on July 26 with demonstrations and progress to phased strikes. He accused the bureaucracy of deceiving the government and threatened to escalate protests if the new FBR powers were not taken away.
