Foreign made: Import of used cars jumps 63% over 3-month period

PAAPAM officials claim dealers minting profits by misusing policy.

KARACHI:

The import of used cars jumped to 9,569 units in the first three months of fiscal year 2014-15, up 63% compared to 5,863 units in the same period previous year.

Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) Chairman Siddique Misri said the policy – which states that the import of used cars is restricted under the transfer of residence, personal baggage and gift scheme – is being misused by dealers.

Misri said that despite the misuse, government officials were caving into the demands of used car dealers.

The Paapam chief added that even after the government’s budgetary measure to grant tax exemptions on Hybrid vehicles, dealers were avoiding decreasing prices. The government had announced reducing duty and tax rates ranging from 50% exemption on vehicles upto 1,800cc and 25% upto 2,500cc engine categories.

Meanwhile, Paapam Vice Chairman Iftikhar Ahmed said car dealers are making huge profits, ranging from Rs200,000 to Rs400,000 on the sale of each car.

He claimed that transactions were not being conducted in a transparent manner and without any contribution to the exchequer, as no taxes are paid on profits made by the used car dealers. These imports are also damaging the Pakistani economy as they result in a loss of valuable foreign exchange.

Paapam officials said that the Federal Board of Revenue needed to step up and audit the sales of car dealers, which would increase the collection of taxes that are being evaded.

Secondly, government agencies are duty bound to carry out an investigation of dishonest customs appraisement officers as well as the immigration officers who are reported to have been part of this scam of used car imports in the name of overseas Pakistanis.

Published in The Express Tribune, November 1^st, 2014.

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