Govt to reduce customs duty on bike imports

Proposal, currently under debate, faces severe criticism by local industry.

Shahram Haq August 16, 2012

LAHORE: The government is considering lowering the customs duty rates on completely built units (CBU) than those in India and China. The proposal under debate in the Economic Coordination Committee (ECC) proposes a reduction in the duty levied on import of bikes to 35% from 65% at present.

The scheme has come under severe criticism from the local automobile industry. The officials of Pakistan Automotive Manufacturers said that the policymakers have no confidence in the local industry that registered a growth rate of 37% year-on-year average during the previous decade, after absorbing inflation shocks and facing power outages. If the proposal is framed into a policy, it will sink the industry making millions of jobs redundant and create significant capital losses, they said.

General Engineering CEO Arshad Awan said that framing a policy is a serious business. “Unfortunately in Pakistan, policy initiatives come as hasty reaction to situations, purely stemmed in personal gains and expression of authority,” he said. Thus, policies hurt rather support economic growth or success of initiatives, he added.

“We are unable to comprehend the reason for a complete ‘one-eighty’ in policy,” he said. Strange justifications have been presented to the ECC that the industry has become strong enough to absorb the CBU import from China and India, he said.

Awan said that China is the largest producer of motorcycles in the world; with a production of 27 million units in 2010-11, its motorcycle industry is booming. Though still it maintains a 90% custom duty on CBU imports, under strict monitoring and regulation by the Chinese government, he added.

Published in The Express Tribune, August 16th, 2012.

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