ALTHOUGH the government managed to exploit the power struggle between rival factions in the Federation of Pakistan Chambers of Commerce & Industry to undermine a strike call against new tax enforcement steps, a stronger than expected nationwide response on Saturday to the shutter-down protest, called by business leaders in Karachi and Lahore, shows that the issue has not been resolved. At most, the government has bought itself only a few weeks to chalk out its future strategy. Even the faction currently controlling the FPCCI will find it difficult to help the authorities without losing the traders` support. At the heart of the dispute are controversial budget provisions that grant FBR officials the powers to arrest taxpayers on allegations of fraud, station tax officers at factory premises to monitor evasion, enforce digital invoicing and e-billing and harshly penalise cash business transactions over Rs200,000.

For how long, though, can the government withstand pressure from the traders, who are among the ruling PML-N`s core supporters across urban centres in central Punjab? Officially, the authorities insist they will not bow to pressure. Yet, behind the scenes, some in the government are said to be working towards a compromise. Just recently, a federal adviser reportedly assured the leadership of the Lahore Chamber of Commerce & Industry that a meeting with the prime minister would be arranged to find a settlement. This is not surprising, given that many in government have long benefited from weak tax enforcement and have their own business interests to protect. There is no doubt that the new provisions require stronger safeguards to prevent their misuse. However, it would come at a serious cost to an already struggling national economy and heavily burdened honest taxpayers if the PML-N were to roll back these steps to preserve its political base. Ultimately, taxation decisions are a political choice regardless of whether or not they align with the government`s broader economic goals.