Importers of used cars fear that the government is also considering a proposal of increasing import duty by 10% on all used imported cars of up to 1,800cc engine. PHOTO: FILE
APMDA Chairman H M Shahzad, in his letter, said that it was surprising to see the government taking back the 10% Federal Excise Duty (FED) from locally assembled vehicles above 1,800cc, which had been originally simultaneously imposed on both locally assembled and imported vehicles.
“For the sake of providing a level-playing field, the government should have withdrawn this duty from both locally assembled and imported vehicles,” he said.
These government measures have disappointed people who are engaged in the business of used cars, the letter said.
He also mentioned that the proposed measure in 2015 budget to cut import duty from 30% to 25% for the completely knocked down (CKD) and semi knocked down (SKD) units will also support the local car assembling industry.
Importers of used cars fear that the government is also considering a proposal of increasing import duty by 10% on all used imported cars of up to 1,800cc engine. They believe that such a move will completely shatter the market of used imported cars.
“It seems that all our efforts and expectations have gone down the drain. The above adverse measures, if implemented, will kill this industry for good – an industry that can yield more than Rs50 billion in revenues per year,” the letter said.
Used car imports in the country are showing a continuous downward trend. The total car imports during the first 10 months (Jul-Apr) of current fiscal year remained 17,984 units, down 57% from 41,800 units in the same period of the previous fiscal year.
In fiscal year 2013, car imports declined to 45,378 units, down 17.5% compared to 55,000 units in fiscal year 2012.
In fiscal year 2012, imports of used cars hit the peak when they jumped phenomenally by 162% from just 21,000 units a year earlier, sparking worries among domestic assemblers who believed imported cars were directly hurting their sales.
Published in The Express Tribune, June 6th, 2014.
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1732882586-0/Express-Tribune-(7)1732882586-0-270x192.webp "gold prices rise in pakistan international markets")
In return car local assembler will enhance capacity create jobs .simple pmln wants Pakistan economy to boost
@Dooni: what about the fact that the consumers are suffering? Local cars are expensive and lll-equipped. They lack basic safety and luxury features that imported cars half their price offer. Consumers have a handful of models to chose from and have to pay phenomenal prices for those. The local car lobby has never concentrated on improving quality instead it lobbies the government to introduce laws that leads to them monopolising the industry.This is shameful.
Govt should increase competition by slashing duties on used imported cars. We get junk from local manufacturers who increase price with consistent decrease in quality.
@Dooni: True, and we all also know that importers of used cards are exploiting a loop-hole in law, which drastically cuts down the duty. This results in huge losses to government each year because of unpaid duties. If their given figure of Rs. 50billion revenue is correct for 18000 units then by law this revenue should have been in excess of Rs. 150billion. Government should reply their letter with a notice of tax evasion.....
On what grounds local car manufacturerer supported by Govt. ? We pakistanis get the poorest possible manufactured cars. Why Govt. didn't set conditions related to Quality when deciding to tax heavily imported cars? why before budget the news was spread that custom duty etc will be reduced for imported vehicles in the budget.....? smells fishy"
These auto dealers act more like thugs than traders. Instead of supporting the local industry which generates more jobs, provides taxes and keeps the money in the economy they want imported cars to be given level playing field over local manufactures. How low and selfish and greedy can one get?