ISLAMABAD:
Local automobile manufacturers have asked the government to impose a transfer tax on the sale of vehicles within six months of their purchase.
Talking to The Express Tribune on Saturday, Indus Motors CEO Parvez Ghias said they had also opposed the government’s decision to allow the import of vehicles under the completely knocked down (CKD) condition. “Instead, the government should announce income tax holiday for new investors or provide them with land on reduced rates,” he said.
Ghias said allowing new investors to import cars under the AKD condition at five per cent duty would hurt the business of local automobile manufacturers.
He said Indus Motor Company would stop manufacturing Coure before June 30, 2012. “The decision has been taken in view of its high cost of production.”
He said the government was considering the proposal to reduce the import duty for vehicles in complete bullet unit (CBU) condition from 50 per cent to 25 per cent.
Commenting on the state of the automobile industry, he said 1.3 million people were associated with it across the country, adding that the demand for cars was likely to increase with the rise in per-capita income.
Ghias said the prices of used cars increased by 60 per cent in the past one year. “The government is trying to determine the prices of cars although it should have nothing to do with this issue.” He said Indus Motor Company had record production until June 30, as it produced over 50,000 vehicles. “But the sales have remained low since then, because customers didn’t place orders in view of the conflicting reports about federal excise duty and sales tax in the federal budget for the current fiscal year.”
Published in The Express Tribune, September 25th, 2011.
COMMENTS (2)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
Setting up these plants was a bad idea in the first place because they are simply not competitive. IMC and Honda have done little besides crying over what a raw deal they are getting simply because the government is making a move (for a change) that can make cheaper cars accessible to people.
On the other hand, Pakistan's motorcycle industry is vibrant and competitive. The government should turn its attention to them instead so that they may increase exports to Far East and MENA region. The country can cash in on the efficiency of the motorcycle industry quite easily.
Also, this number of 1.3 million jobs is extremely bloated. It includes not just employees of affiliated companies and their distributors, along with the employees of these companies.... it even includes mechanics, workshop workers etc that have nothing to do with these companies and will conitnue to exist even if these guys shut shop and leave.