Pakistani businesses seek to avoid tax by switching to cash

Karachi

RUNNING a wholesale grocery shop in the southern Pakistani port city of Karachi, 43-year-old Khan used to write as many as 40 cheques a month to buy goods from sugar to Unilever NV tea bags.

That changed when authorities, in a bid to clamp down on widespread tax avoidance, started charging a levy on every bank transaction above 50,000 rupees (S$672.89) for non-filers. Mr Khan, who asked for his first name to be withheld to avoid prosecution, now pays most suppliers from a pile of cash he keeps at home, changing his practice of many years.