KARACHI: Pakistani jewellers on Tuesday initiated a powerful nationwide strike against what they termed as harassment and unjust tax demands by the Federal Board of Revenue (FBR). The strike resulted in the complete shutdown of jewellery shops across major cities, including Karachi.
Protest in Karachi
Traders gathered in protest in Karachi, where Qasim Shikarpuri addressed the demonstrators. 'We went to Islamabad, but our issues were not resolved. FBR's oppressive actions are unacceptable,' he said. 'We pay taxes and will continue to pay, but we will not pay bribes. FBR is demanding millions in bribes.'
Allegations Against FBR
Shikarpuri accused FBR officials of turning into a 'gang' and claimed that in Peshawar, authorities were demanding Rs250 million from jewellers. He rejected what he called 'black laws' of FBR and a 600% tax demand by the FBR chairman.
The jewellery industry currently contributes Rs22 billion in taxes across Pakistan and has offered to increase it to Rs44 billion, but refuses further unjust demands.
Escalation Warning
Protesters warned of escalating action, including a complete nationwide shutdown, and said they would announce their final decision in two days.
Gold Prices Rally
The strike coincided with a strong rally in international gold prices. Spot gold rose 0.9% to $4,346.09 per ounce by 1615 GMT, after touching its highest level since June 5, as per Reuters. US gold futures gained 0.4% to $4,366.50.
The uptick was driven by easing expectations of a US Federal Reserve rate hike this year, following an interim US-Iran peace deal that lowered oil prices and reduced inflation fears. Brent crude futures dropped below $80 a barrel.
Market Analysis
Interactive Commodities' Director Adnan Agar said gold had declined in recent days but recovered on Tuesday, trading near $4,434 after hitting a low of $4,306 and high of $4,354. He noted strong resistance at $4,370-4,400. A break above $4,400 could push prices toward $4,500-4,600, while failure to do so may lead to a further downside.
