KARACHI: The local auto assemblers are highly worried over possible drop in sales following the government’s budgetary measure of barring non-filers from purchasing new vehicles.

CEO Indus Motor Company (IMC) Ali Asghar Jamali told Dawn on Tuesday that “60 per cent buyers of cars and light commercial vehicles (LCVs) are non-filers, while 40 per cent are filers.”

“Our sales will collapse if 60pc non-filers fail in lifting our locally made cars and LCVs,” he feared.

When asked whether people are making a beeline at the showrooms to book vehicles before the new law implements from July 1, he said “so far there is no panic among buyers as majority of them are trying to understand the new condition.”

He expressed his surprise that this condition does not apply on used car buyers.

Pakistan Automotive Manufacturers Association (PAMA) Director General Abdul Waheed Khan also estimated the same share of non-filers and filers in car and LCVs sales.

He said if a filer, out of total 1.2 million, buys a vehicle once in five years, the yearly sales are expected to go down to about 240,000 units, against the current projected figure of 350,000 units.

“If this condition takes effect, all industry volume projections to 550,000 units under the Auto Policy 2016-21 will be lost,” he remarked.He proposed different tax rates for filers and non-filers for the next five years encouraging the citizens to file returns to pay comparably less tax on passenger cars and commercial vehicles.

“This idea may be carried further to tighten the noose of non-filers, purchasing the automobiles, by gradually increasing the amount of advance tax, under section 231B of Income Tax Ordinance, for non-filers and simultaneously decreasing this tax for the filers,” he added.It is not clear whether restriction of purchasing vehicle by non-filers also applies on bus and truck segments. When contacted Chief Operating Officer (COO), Hinopak Motors Ltd (HML), Naushad Riaz told Dawn that in the budget statement the government used the word ‘vehicles’, which includes cars, light and heavy commercial vehicles.

“The ratio of filers and non-filers purchasers are 40:60 in case of commercial vehicle segment,” Naushad estimated, adding that if this law is approved by the National Assembly, then the industry’s sales will definitely suffer.

Published in Dawn, May 9th, 2018