Pak. military regime gives in to 'barra' traders?

By Amit Baruah

ISLAMABAD, MAY 1. The Pakistan military regime has backed down from a head-on confrontation with ``barra'' market traders or those who sell smuggled goods. The crackdown, which was scheduled to begin today, has been postponed.

Instead, a bizarre agreement has been reached between the Interior Minister, Mr. Moinuddin Haider, and representatives of the `barra' market controllers. All shopkeepers selling smuggled goods will have to pay a fixed tax of Rs. 10,000 for a ``cabin'', Rs. 15,000 for a shop with one shutter and Rs. 40,000 for a shop with a ``double'' shutter. A tax of Rs. 20,000 ``per shutter'' has been agreed to for a shop with more than two shutters. Payment of this tax is to be made by May 31.

Also, the `barra' traders have been told to dispose of their existing stocks of smuggled goods within 90 days, after which all goods will be subjected to taxation on a ``normal basis''.

While details of how much revenue will be raised are still awaited, the agreement is a major departure from the tough stance adopted by the Government.

Senior functionaries of the military regime had been promising that from May 1, a countrywide crackdown would be launched. But yesterday's agreement appears a major compromise the Government's position.

Given that a military Government is in power (which does not have to play to the gallery), it was believed that the administration could take difficult decisions and implement them. However, this extreme compromise does not augur well for the Government. Its compromise with the barra traders could reflect that behind the public posture of toughness, this Government is as ``soft'' as were its civilian predecessors.

During the Nawaz Sharif Government, the administration imposed a General Sales Tax (GST), which led to a massive agitation by traders all over the country. Under pressure, the Sharif Government was forced to withdraw the GST.

Is the military Government going the civilian way? Is it in a position to implement promised measures? The `barra' episode does not add to the stature of the military Government as one which is decisive and sticks to its public position.

Also, it was being widely expected that the military Government would, in the near-future, re-introduce the GST as was suggested by the IMF-World Bank combine. Now, it remains to be seen whether the military Government will be able to take such a step or not.

The Pakistani state is unable to raise revenues. Its effort to make traders pay taxes (most people here prefer smuggled goods to locally- produced ones) is prompted by the fact that more revenues have to be raised to qualify for renewed IMF assistance.

However, the Government seems to have encountered the full might of vested interests. Given that this smuggling trade is linked to what Pakistani writers call the ``transport mafia'' operating between Pakistan and Afghanistan, there is little doubt that transforming the status quo is no easy task.

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Section  : International
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