‘Heavy duty’ on vehicles parts irks Senate panel

ISLAMABAD:

The Senate Standing Committee on Industries and Production on Thursday expressed concern over the heavy duty being charged on the parts of locally manufactured vehicles.

The panel also summoned the Federal Board of Revenue (FBR) in the next meeting to provide a summary of taxes imposed on vehicles.

The standing committee headed by Senator Ahmed Khan discussed the 48% duty imposed on locally manufactured car parts.

Senator Nauman Wazir Khattak said that because of the duty imposed, the consumers preferred purchasing imported cars over the ones manufactured locally.

He said that because of the increase in duty, there had been a decline in local manufacturing of car parts and that factories manufacturing the car parts were now shutting down because of the fall in consumer demand for the same.

He noted that a rapid closure of factories because of the imposition of heavy taxes and a decline in demand had consequently resulted in unemployment across the sector.

Senator Mian Ateeq Shaikh lamented that low quality and high-priced cars were being manufactured in the country, and that the own money on them was increasing with every passing day, which was adding to the woes of the consumers.

He also discussed the standards of safety, overall quality and emission checks of locally manufactured vehicles and noted that these features would have to be improved so that the consumers prefer the locally manufactured cars over the imported options.

Senator Shakkh maintained that a roadmap for the car manufacturers should be established for the purpose.

Masood Rehmani from Honda observed that they had been the top taxpayer during the last six years.

“50% to 65% parts used in our cars are locally manufactured. Most of our raw material is imported,” he said.

The committee chairman observed that the consumers had to change the tyres in the new cars due to their poor quality.

Commenting on the skyrocketing prices of cars, Senator Asif Kirmani pointed out that the price of a small car had shot to Rs1.6 million.

He said that a middle-class person had to sell the jewelry of his family or keep the belongings as mortgage in order to buy a small car.

Senator Shaikh urged the premier to take action against the “car mafia”.

The committee was told that the demand of cars during the current year had declined as compared to the previous years, while the panel called the FBR to provide a summary of taxes on cars in the next meeting.

The committee chairman also sought the participation of industries minister in this regard.

The Engineering Development Board chairman informed the body that the Economic Coordination Committee had formed a committee on Electric Vehicles Policy and added that the cabinet had also approved it.

He further said that 48% parts of the motorcycles in the country were imported.

Pakistan Steel Mills (PSM) CEO told the panel that thousands of acres of land belonging to the institution had been given to different organisations.

He acknowledged that the performance of the PSM was not satisfactory and that its employees drew salary from the institution but had been working in other places.