Chain stores reject early market closure, call for simplifying tax regimes
Business
Say shutting down businesses by 8pm will adversely affect revenue collection
LAHORE (Web Desk) – Rejecting the government decision to go for early closure of market by 8pm with effect from July 1, the chain stores also called for simplifying the sales tax and income tax regimes for retailers.
In a letter sent to Prime Minister Shehbaz Sharif and Finance Minister Ishaq Dar, the Chainstore Association of Pakistan (CAP) – the largest trade body of tax-compliant retailers – the two latest moves would adversely affect business activities and thwart the efforts aimed at improving the economic situation in Pakistan.
CAP Chairman Tariq Mehboob Rana said the heavily lopsided taxation regime and excessive restrictions on retail forced many tax-compliant Tier-1 retailers to shut down dozens of outlets across the country in the past year.
“This pattern indicates that the viability and market share of formal businesses in this sector is drastically reducing thus setting off alarm bells in the industry.”
He said early closure would result in reducing the employees by half in major markets and shopping malls, but the smaller markets and neighbourhood stores were going to find ways to stay open, as was experienced during repetitive lockdowns during the Covid-19 pandemic.
“We have proposed a balanced solution for retail to close at 10pm instead of unlimited timings, which has already been enforced in Lahore since last Dec 2022.”
According to Mehboob, the measure will counterproductively cause a significant plunge in revenues of up to 30 per cent or retail businesses of which ‘Tier-1 retailers’ are connected with the FBR-POS system.
He also demanded the government to simplify the tax regimes for retailers of all sizes, besides removing the discriminatory classes of ‘Tier-1 Retailers’ and ‘Other-than-Tier 1’ Retailers, which have badly impacted the viability of the organized retail sector.
The increase in the reduced sales tax of 12pc on locally manufactured textile and leather goods sold by integrated retailers to 15pc will make products even more expensive in a troubled economy impacted by high inflation and reduced purchasing power, he added.
