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Pakistani Merchants Protest Taxes

June 2, 2000

ISLAMABAD, Pakistan (AP) _ Undeterred by the government’s drive against tax evaders, merchants kept shops shuttered today in most main markets for the fifth straight day, demanding withdrawal of the sales tax.

The military-led government plans to impose a 15 percent sales tax and has launched a massive campaign to document business transactions and residential properties. Merchants have staged a series of strikes and protests.

On Thursday, the All Pakistan Organization of Small Traders and Cottage Industries, spearheading the anti-tax campaign, announced that shops will remain shut throughout the country for another three days.

This is the longest series of strike in Pakistan, said Omar Sailya, chairman of the organization. ``The government should realize the gravity of situation and withdraw its unpopular measures,″ he said.

The merchants say that they oppose documentation because most of their colleagues are unable to complete the complicated tax forms. In Pakistan, where the literacy rate is barely 40 percent, shopkeepers rely mostly on cash payments.

But the government refused to budge.

On Friday, the tax department published an advertisement in newspapers saying that tax evaders have ``no where to hide.″

``Clear your conscience. Pay tax for yourself _ your country,″ the advertisement said.

All state-run stores now remain open seven days a week to ease the impact of the strike. The authorities have also promised protection to those shopkeepers who keep shops open during the strike.

Out of a population of Pakistan’s 140 million people, only 1.2 million people pay taxes. The government says boosting revenues is essential to revive the battered economy.

Successive governments have tried and failed to document Pakistan’s economy and register businesses and tax payers.

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