ISLAMABAD: Our economy is losing a huge amount of revenue in the form of taxes and duties every year through the smuggling of automobile parts. The fact is that these automobile parts smugglers usually work in collusion with government authorities to bring inferior or substandard parts into the country. This has severely damaged our auto parts industry and the usage of these imported inferior parts also affects the performance of vehicles and endangers the safety of automobile users.
Under the existing customs rules, automobile parts classification is one of the major issues that affect their import, since the duty is calculated on the basis of their weight rather than their value. This creates a wide disparity in the valuation of imported parts and the net result is that local auto parts’ manufacturers lose their competitiveness. In order to curtail this menace, the government should implement realistic customs rules, take effective measures to completely block the smuggling of auto parts and ensure the recovery of 16 per cent of the sales tax from all auto parts importers and sellers.
It is extremely important to enforce these measures in order to safeguard availability of genuine parts and also to protect the local auto parts industry.
Published in The Express Tribune, June 22nd, 2012.
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