Spare parts importers urge govt to slash taxes

Say lower duties will help tackle smuggling of motorcycle spare parts

KARACHI:

Importers of bike spare parts have urged the government to reduce taxes as parts smuggling is increasing in Pakistan due to high tax rates.

All Pakistan Motorcycle Spare Parts Importers and Dealers Association (APMSPIDA) Chairman Khalid Waheed said the authorities should reduce the exorbitant duties and taxes, particularly 35% customs duty and 11% additional duty, on the import of motorcycle spare parts, which increased the cost and the spare parts became unaffordable for the poor public.

During a meeting held at the Karachi Chamber of Commerce and Industry (KCCI), the association chairman pointed out that in addition to the customs duty and additional duty, the importers of motorcycle spare parts also paid numerous other taxes including sales tax, income tax and additional sales tax, which turned their finished goods uncompetitive.

“Due to widespread smuggling of motorcycle spare parts, the legitimate importers and dealers have been facing immense hardships and are not in a position to compete with the smuggled spare parts because of exorbitant taxes and duties along with higher valuation for the motorcycle spare parts, which have to be drastically reduced to discourage smuggling and encourage legal imports,” he lamented.

After the coronavirus lockdown, the demand for two-wheelers has increased massively and the current example is Atlas Honda, which posted the highest-ever bike sales of 116,000 units in October 2020 due to robust demand and the company ran in double shift, according to Arsalan Hanif, analyst at Arif Habib Limited Research. KCCI’s former president Anjum Nisar stated that customs duty, which currently stood at 35%, should be reduced to 20%.

Speaking on the occasion, KCCI President M Shariq Vohra assured the delegation that the KCCI supported their demand to bring down the exorbitant taxes and duties, which were badly affecting domestic production. He suggested that a team should be constituted comprising representatives of the KCCI and APMSPIDA, which should be tasked with identifying the issues and giving suggestions in order to create a favourable environment, which would benefit the national economy by creating employment opportunities. KCCI Senior Vice President M Saqib Goodluck was of the view that the best solution was to bring down the custom duty and taxes while the traders must also completely boycott smuggled items.