Importers of bike spare parts in trouble over high taxes

Association chairman criticises govt for imposing cumulative 85.5% duty

KARACHI:

Stakeholders of the motorcycle spare parts segment of the automobile industry have said that the sector is overburdened with a high customs duty and additional customs duty applicable to the import of spare parts of two-wheelers.

Speaking to The Express Tribune, All Pakistan Motorcycle Spare Parts Importers and Dealers Association Chairman Khalid Waheed criticised the government for slapping a cumulative 85.5% duty on commercial importers of auto parts.

“This has left the legal motorcycle spare parts importers in trouble and encouraged smuggling of the merchandise,” he said, adding that the motorcycle spare parts industry was contributing to strengthening the country’s economy.

To discuss the issue, the association chairman held a meeting with Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Mian Nasir Hayyat Magoo.

He stressed that trade bodies including the FPCCI should highlight the issues facing the motorcycle spare parts importers with the government departments and ministries concerned for their swift resolution.

During the meeting, former FPCCI vice president Khurram Ijaz said the trade bodies were repeatedly appealing to the government to reduce duties and taxes on motorcycle spare parts and abolish the additional duty to discourage smuggling.

Former motorcycle spare parts importers body president Faisal Khalil recalled that the rate of customs duty used to be low a few years ago and as a result, smuggling was significantly lower. “Smuggling of spare parts surged following the increase in taxes.”

Waheed told Magoo that the government had imposed 35% customs duty, 11% additional customs duty, 17% sales tax, 3% additional sales tax and 5.5% income tax on the motorcycle spare parts importers. “Importers are carrying the burden of 85.5% duties and taxes,” he said.

He emphasised that the government should minimise taxes and duties in the upcoming budget for fiscal year 2021-22 to encourage legitimate imports of spare parts. “Importers of motorcycle spare parts have been pushed to the brink of disaster due to heavy duties,” he said.

Association of Pakistan Motorcycle Assemblers (APMA) Chairman Muhammad Sabir Shaikh requested the federal government to immediately reduce the import duty on completely built unit (CBU) engines and electric two-wheelers.

He highlighted that the customs duty applicable to motorcycle parts ranged between 50% and 90%, which was extremely high.

Published in The Express Tribune, February 19^th, 2021.

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