PAMA wants govt to abolish cash margins on CKD import
Says such measures will put local assemblers at competitive disadvantage
Such measures will put local assemblers at competitive disadvantage. PHOTO: AFP
LAHORE:
Pakistan Automotive Manufacturers Association (PAMA) has requested the Ministry of Finance to abolish the requirement of 100% cash margin for issuance of Letters of Credit for import of CKDs of automotive vehicles.
In a letter to the ministry on March 3, PAMA Director General Abdul Waheed Khan stated that the State Bank’s notification ERD/M&PRD/PR/01/2017-16 (dated February 24, 2017) imposed 100% cash margin requirement on the import of certain consumer items including motor vehicles (both in CBU and CKD condition).
“In this regard, we would like to submit that the automotive industry has just started taking strides towards growth after facing a decline in the last couple of years. The parts imported under knock down condition i.e. CKD is an input material for vehicle manufacturing.”
“We are supportive of these measures if imposed on import of non-essential items mainly in finished form, which in case of automotive are Completely Built Up units/vehicles (CBUs). “The imposition of 100% cash margin on import of CKDs (for manufacturing vehicles) has shaken the confidence of foreign investors and will also increase the cost of doing business.
“This measure will give competitive disadvantage to local assemblers, over import of used cars under baggage scheme, normally making payment through TT remittances and other channels,” stated the letter to the ministry.
Published in The Express Tribune, March 7th, 2017.
Pakistan Automotive Manufacturers Association (PAMA) has requested the Ministry of Finance to abolish the requirement of 100% cash margin for issuance of Letters of Credit for import of CKDs of automotive vehicles.
In a letter to the ministry on March 3, PAMA Director General Abdul Waheed Khan stated that the State Bank’s notification ERD/M&PRD/PR/01/2017-16 (dated February 24, 2017) imposed 100% cash margin requirement on the import of certain consumer items including motor vehicles (both in CBU and CKD condition).
“In this regard, we would like to submit that the automotive industry has just started taking strides towards growth after facing a decline in the last couple of years. The parts imported under knock down condition i.e. CKD is an input material for vehicle manufacturing.”
“We are supportive of these measures if imposed on import of non-essential items mainly in finished form, which in case of automotive are Completely Built Up units/vehicles (CBUs). “The imposition of 100% cash margin on import of CKDs (for manufacturing vehicles) has shaken the confidence of foreign investors and will also increase the cost of doing business.
“This measure will give competitive disadvantage to local assemblers, over import of used cars under baggage scheme, normally making payment through TT remittances and other channels,” stated the letter to the ministry.
Published in The Express Tribune, March 7th, 2017.