Dealers for allowing import of up to 5-year-old used cars

All Pakistan Motor Dealers Association believes the measure will lead to a 100% increase in tax collection

KARACHI: The All Pakistan Motor Dealers Association (APMDA) on Thursday urged the government to allow commercial import of vehicles and increase the age limit of used car imports from the current three to five years.

In a letter to Finance Minister Ishaq Dar, APMDA Chairman HM Shahzad said these measures would not only lead to an increase in documentation of the economy but would also generate 100% more taxes for the government.



The demands were part of the budget proposals for fiscal year 2016-17.

“It would also bring the import of used vehicles into the tax net and help the government expand its tax base,” said Shahzad. “We suggest that only certified members of the APMDA should be allowed to import used vehicles on commercial basis for the sake of transparency of trade.”

Targeting the local car assemblers, he said they were enjoying monopoly in the market, which allowed them to increase prices of their cars.

“The promised deletion levels have also not been achieved despite the passage of many years.”



Regarding the regulatory duty, he said the issuance of a Customs notification had caused problems for the industry.

“This notification has denied the legal and social right to calculate depreciation at 2% per month on old and used vehicles of above 1,800cc brought by overseas Pakistanis. This facility was available for the last 30 years before it was abruptly withdrawn,” he said.

Shahzad also said the government should impose a fixed duty on the import of used vehicles of above 1,800cc as was the policy for vehicles up to 1,800cc, which were subject to a fixed rate of import duty.

This, he added, would help the government check the revenue loss suffered due to arbitrary fixing of import duty and would help eliminate tax variation at different ports of the country. In this case, the tax collection will go up.



The APMDA chairman pointed out that the amnesty scheme of March 2013 had resulted in regularising of 52,000 smuggled vehicles of all engine capacities without any restriction of age limit.

To avoid smuggling in future, he suggested that the government should review the current policy, reduce the tax rate and increase the age limit of used cars as these would make smuggling less attractive and also increase the government’s revenues substantially.

Published in The Express Tribune, May 20^th, 2016.

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