Traders are the backbone of the economy but unfortunately the country’s economy is stagnating due to the government’s poor policies and incompetency, said Pakistan Industrial and Traders Associations Front (PIAF) Chairman Fahimur Rahman Sehgal. He made the remarks when he, along with Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Irfan Iqbal Sheikh and other members, visited the office of the Pakistan Automobile Spare Parts Importers and Dealers Association (PASPIDA). Sehgal said due to the prevailing political instability, the government had lost the right direction, which was a cause of grave concern.
He urged the government to take the business community on board for suggestions on the next budget to achieve high economic growth. As the trade and industry are already under a severe burden of taxes, he called on the government to provide tax relief in the upcoming budget. Citing a report saying that the ban on auto parts imports has led to a shortage of replacement parts and an increase in smuggling, Sehgal said that import curbs were hurting the auto industry, and ultimately hindering the legitimate business.
Echoing similar views, the FPCCI president mentioned that there were a lot of taxes at the provincial and federal levels while there was no significant expansion in the industry. The meeting observed that the PIAF and PASPIDA had been maintaining a close liaison for the past two decades and would continue to raise their voice in support of the traders. “Many auto parts are not being imported under HS codes 84 and 85,” former PASPIDA chairman Arshad Islam told The Express Tribune. “This has caused a lot of friction.” At present, auto parts imports are allowed on a 360-day document approval (DA) basis, which means that the seller will be paid in 360 days instead of the instant payment mode of Letter of Credit (LC). However, “foreign companies are not comfortable with this arrangement as banks are not willing to issue guarantee that they will be paid in 360 days due to the fluctuating rupee value,” he lamented.
Moreover, smuggling of auto parts was accelerating owing to the high demand for replacement parts, Islam said, adding that Pakistan was a third-world country with old-model cars that required frequent parts replacement. The country’s trade deficit decreased to $0.83 billion in April 2023, the lowest since April 2011.
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