Former Finance Minister Miftah Ismail said on Saturday that due to “internal politics” tax could not be imposed on retailers (shopkeepers) during his tenure in the QBlock.
Miftah said: “There are 2.2 million shops [in Pakistan] and only 30,000 pay income tax.”
“When we tried to impose the tax, the shopkeepers put political pressure,” he said, adding that as a result “we had to back down”.
Miftah’s remarks came in response to the recent remarks of former Federal Bureau of Revenue (FBR) chairman Shabar Zaidi.
In an interview two days ago, Zaidi had expressed his dismay at bringing retailers under the ambit of taxation.
Retailers are market mafia and when we take action against them they go on shutter down strike.
He also said that Karachi businessmen “beat him up” and were not willing to participate in any document.
“They [retailers] said no one in the market would pay the tax.”
“Unpacking” these remarks, Miftah said there was a lot of truth in Zaidi’s words. However, the term “mafia” was not accurate.
“I don’t think these lobbies…that exist all over the world — political lobbies, retailers’ lobbies and agricultural lobbies — should be called mafia,” Miftah said.
Zaidi commented in his interview: “None of our governments are powerful enough to fight [retailers]. The tax system cannot be fixed until you bring them into the tax net. “
In response, Miftah said that it is the duty of retailers to pay tax.
“If all shopkeepers are taxed at Rs 3,000, it won’t make much difference to them. Who can’t pay a tax of Rs 100 a day? Understandably, no one likes to pay tax, but this is a lobby. , not the mafia.”
However, he said taxing agriculture is complicated.
“Only the provinces can collect this tax, not the Centre. [Yet] you have given so much money to the provinces,” he added.
He added that only acre should be taxed.
Miftah said that this is the case of real estate. He suggested that construction in the country should be encouraged while ‘file trading’ should be discouraged.
He said that there should be tax on property, people are buying and selling files.
“Various NOCs are sought for setting up industries. It is difficult to start an industry and easy to invest in real estate,” he said.
