Age limit of imports: Automobile lobbies on a crash course over decision
Finance committee wants all stakeholders on board to decide auto assembler’s fate.
KARACHI:
The national Assembly Committee on Finance and Revenue seeks to take all stakeholders into confidence before deciding on the age limit for imported vehicles. Local assemblers have been lobbying for reduction in age limit from five to three years, and were handed the golden egg by the Economic Coordination Committee (ECC); however, the finance committee killed the goose terming the reduction as ‘non-transparent’.
The ECC on November 22, 2012 decided to reduce the age limit of imported used cars from five to three years with effect from December 15.
“We want to take input from both car assemblers and car importers and all other concerned ministries in coming days before taking any decision on car imports,” chairman of the National Assembly Standing Committee on Finance and Revenue Khawaja Sohail Mansoor told The Express Tribune.
The finance committee had already suggested to the government to not to issue the notification of cutting down the age limit of imported cars.
We may call a joint meeting of the Public Accounts Committee in a few days to listen to the arguments of the Federal Bureau of Revenue, Ministry of Finance and Ministry of Commerce before we do this, we do not want government to issue the notification, he added.
Government’s revenues will significantly take a beating if ECC’s decision materialises, mainly due to low collection of duties. It was able to collect Rs32 billion as import tax of 55,000 cars imported in the fiscal year 2011-12.
The decision to allow five-year old imports was taken in February 2011 to push the local automobile sector to decrease car prices by increasing competition. The decision actually spurred imports as the share of imports phenomenally increased to 55,000 units in the financial year 2011-12, up 162% from 21,000 cars a year ago.
However, during the same period, sales of locally assembled cars also surged 23% to 157,325 units compared with the preceding year’s 127,944 units.
But the new fiscal year has seen sales of local cars plunge causing serious financial problems for the top three car assemblers of the country – Atlas Honda, Indus Motor and Pak Suzuki.
Local car assemblers say that the surge in car imports is the biggest reason why their sales are depressed.
Published in The Express Tribune, December 7th, 2012.
The national Assembly Committee on Finance and Revenue seeks to take all stakeholders into confidence before deciding on the age limit for imported vehicles. Local assemblers have been lobbying for reduction in age limit from five to three years, and were handed the golden egg by the Economic Coordination Committee (ECC); however, the finance committee killed the goose terming the reduction as ‘non-transparent’.
The ECC on November 22, 2012 decided to reduce the age limit of imported used cars from five to three years with effect from December 15.
“We want to take input from both car assemblers and car importers and all other concerned ministries in coming days before taking any decision on car imports,” chairman of the National Assembly Standing Committee on Finance and Revenue Khawaja Sohail Mansoor told The Express Tribune.
The finance committee had already suggested to the government to not to issue the notification of cutting down the age limit of imported cars.
We may call a joint meeting of the Public Accounts Committee in a few days to listen to the arguments of the Federal Bureau of Revenue, Ministry of Finance and Ministry of Commerce before we do this, we do not want government to issue the notification, he added.
Government’s revenues will significantly take a beating if ECC’s decision materialises, mainly due to low collection of duties. It was able to collect Rs32 billion as import tax of 55,000 cars imported in the fiscal year 2011-12.
The decision to allow five-year old imports was taken in February 2011 to push the local automobile sector to decrease car prices by increasing competition. The decision actually spurred imports as the share of imports phenomenally increased to 55,000 units in the financial year 2011-12, up 162% from 21,000 cars a year ago.
However, during the same period, sales of locally assembled cars also surged 23% to 157,325 units compared with the preceding year’s 127,944 units.
But the new fiscal year has seen sales of local cars plunge causing serious financial problems for the top three car assemblers of the country – Atlas Honda, Indus Motor and Pak Suzuki.
Local car assemblers say that the surge in car imports is the biggest reason why their sales are depressed.
Published in The Express Tribune, December 7th, 2012.