Smuggled vehicles: FBR to press on with amnesty scheme to legalise vehicles

Ignores concerns of assemblers and importers, who fear increase in smuggling.

KARACHI: Brushing aside reservations of car assemblers and importers, the Federal Board of Revenue (FBR) defends its amnesty scheme for vehicles that has been brought into the country without payment of customs duty, saying it is in the national interest that will bring some revenue.

The scheme is expected to generate revenue of Rs12-15 billion and will also get around 2.3 million vehicles registered, which are already on roads.

“These unregistered cars are plying our roads. I do not see any harm if the government registers these vehicles by slapping certain penalty and surcharge on car owners,” said FBR spokesperson Asrar Raouf while talking to The Express Tribune.

FBR intends to register as many non-customs paid vehicles as it can before the March 31 deadline given to vehicle owners after which it will take action against all unregistered vehicles.

Smuggled and tampered vehicles pose a big problem in Pakistan that shares a long porous border with Afghanistan, the main source of arrival of most non-customs paid vehicles.

However, the spokesperson was quick to clarify that the FBR was not registering any vehicles that had tampered or forged documents under the amnesty scheme.

Car assemblers and importers fiercely oppose the scheme, fearing it will provide legal cover for vehicles with forged documents. They argue that the scheme will further encourage smuggling as people will wait for the next such incentive.

FBR officials insist that the amnesty scheme has been launched in the wake of directives of the Supreme Court, which has been pressing the government to register unregistered vehicles many of which have been used in illegal activities and terrorism.

“This scheme is in the national interest and I do not think this is going to encourage smuggling of vehicles,” Raouf said when told about the reservations of car assemblers and importers.

All Pakistan Motor Dealers Association (APMDA) Chairman HM Shahzad said the amnesty scheme would discourage legal car imports that bring revenue for the country. “If the government encourages car smuggling like this, we should also leave our business and start smuggling vehicles from Afghanistan,” he said.

The assemblers and importers also apprehend that the scheme will hurt their business interests. They say the addition of a huge number of cars and other vehicles to the market would have a marked impact on sales of both imported and locally assembled cars.

“Assemblers have always been pointing out that there is a big grey market of cars, trucks and buses, which is hurting the industry,” an executive of a car assembler said, but did not want to be named. “How could you do this. It sets a wrong precedent, will discourage the documented auto sector and encourage car smuggling into the country.”

Published in The Express Tribune, March 12^th, 2013.

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