KARACHI: Auto assemblers have criticised the government for giving “unfair” advantages to dealers and importers of used cars.

In its pre-budget proposals on Monday, Pakistan Automotive Manufacturers Association (PAMA) said that such advantages to dealers were causing damage to not only the local industry, but the national exchequer as well, which is suffering losses due to rampant under-invoicing and misuse of used car import policies.

Under SRO 577(I)/2005, duties and taxes rates were fixed in US dollars way back in 2005 and, except once in 2008, were not appropriately revised , whereas ever since the prices of used vehicles have increased substantially.

“The fixed duties under SRO 577 are substantially lower than the duties under the normal regime,” PAMA pointed out. It also sought revision of the SRO and said it should be updated in consultation with the industry.

The association said under SRO-499 (I)/2013, hybrid vehicles are allowed to be imported at a concessionary rate of duties and taxes in Complete Built-up Unit (CBU) condition only.

Pama proposed that the existing concession to CBUs be also extended to import of auto parts and CKD kits, enabling local production of similar hybrid vehicles.

The association stated that SRO 499(I)/ 2013 should be amended to allow sales tax relief on both import stage as well as on local supplies.

Motor dealers view: The All-Pakistan Motor Dealers Association (APMDA) said that local assemblers are enjoying the monopolistic and consumer-unfriendly benefits of a ban on used vehicles import for the last many years.

“They arbitrarily increase prices of their cars, adding that the promised levels of deletions have also not been achieved despite the passage of many years,” the APMDA said in its pre-budget proposals.

It alleged that assemblers fleece people by demanding 100 per cent advance payment at the time of booking of a car, while the delivery of a car takes three to six months.

Liberal imports, the association said, would be in line with government’s policy of documentation of economy. It would generate 100pc more revenue besides bringing import of used vehicles business into the tax net.

Published in Dawn, April 21st, 2015

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