September 29, 2020

Deadlock Between Fbr And Traders Over Taxation Policies Still Intact

The deadlock between the FBR and traders over fixed taxation regime and CNIC based policy is still well intact and neither side is willing to back down. The deadlock is mainly due to the fixed taxation regime and the CNIC based invoicing policy being enforced by the government. The trader’s associations have given the deadline for October 7 for their march towards Islamabad. Moreover, the Karachi based associations planned a sit-in at the Motondas Mustafa Cloth market today on 27th of September.

The FBR has finally handed an olive branch to the traders and has signaled for negotiations. However, the fixed taxation regime and the CNIC based invoicing policy are both being imposed to curb terror financing and the black economy of Pakistan. There is very little chance that the government would back down from their decision to impose these policies since it has been one of the conditions of the FATF to document the economy and register all transactions above Rs50,000 to curb terror financing activities. The FATF meeting is also scheduled to be held in the coming month of October and compliance on such policies is very important for Pakistan to get out of the grey list of the FATF.

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