Retailers reject tax hike, reduction in business hours

An increase in fixed retail tax from 12 per cent to 15pc and restricting business hours for retail outlets to 8pm will lead to a big drop in sales, store closures and job losses, warned an umbrella body on Thursday. Since the retail sector accounts for 18 per cent of the country’s GDP — $62 billion out of $360bn — a significant reduction in demand for local textile products will have severe consequences. Closure of stores at 8pm could cause a 25-30 per cent drop in revenue and result in a sales loss of $15bn. The retail sector directly and indirectly provides jobs to over 10 million people, accounting for 14pc of the total workforce. Restricting working hours would eventually leave three to four million people unemployed, the Pakistan Retail Business Council (PRBC) fears. The council represents well-known retail establishments across the country. It expressed serious concern over the ongoing budget announcements and discussions between the federal government and various chambers and trade bodies regarding a proposal to raise taxes and restrict retail timings. The PRBC feared that increase in fixed retail tax and forcing shops to close by 8pm would deal a telling blow to the formal retail sector. A reduction in customers’ purchasing power would eventually drive many documented retailers out of business, the council added.