Musharraf postpones tax talks

The government hopes to get $2bn by the end of 2000

Pakistan's military ruler General Pervez Musharraf has postponed a meeting with traders and small business leaders who are protesting against a nationwide tax survey.

It would have been the first time General Musharraf had met the business community to discuss the tax issue.

An official said the talks were delayed due to General Musharraf's planned visit to Iran for a two-day summit of the Economic Co-operation Organisation opening on Sunday.

General Musharraf is to make a two-day visit to Oman after the summit in Tehran and will meet the traders after his return, the official said.

An army-led tax survey designed to document the massive black economy has sparked an increasingly bitter stand-off between the government and business community.

Traders to meet Aziz

Fazlur Rehman Dittu, the chairman of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), said that smal traders and business leaders would discuss their concerns with a high-level committee under Finance Minister Shaukat Aziz on Friday.

Sugar prices have shot by 12%

General Musharraf has also constituted special committees at the federal and provincial levels to hear traders' complaints.

The military government has said it will listen to genuine complaints, but reiterated that the tax survey will continue.

The government is facing a crippling budget deficit, and hopes to collect about $2bn in taxes by the end of the year as a result of the survey.

Gold and sugar affected

Meanwhile, reports from Karachi say that the strike has disrupted gold trade and pushed up sugar prices.

Dealers say the strike could exacerbate a looming sugar supply problem caused by a drop in output.

Local retail prices have jumped over 12% in the last month because fewer shops are open, they said.

Gold traders said the market closures had seriously hit trade at a time when demand peaks.

The month is the start of the wedding season when gold demand surges, a jeweller said, adding retail trade and imports had been hit.

The government wants to clamp down on tax avoidance as part of its efforts to revive the economy and stamp out corruption.