ISLAMABAD: The auto industry has slammed the Federal Board of Revenue (FBR) for withdrawing the regulatory duty (RD) on the imports of luxury vehicles at a time when the country is facing a serious dollar crunch.

In a letter written to the Additional Secretary Revenue Division regarding termination of RD on March 31, Pakistan Automotive Manufacturers Association (PAMA) Director General Abdul Waheed Khan expressed the fears that this move would facilitate some influential to bring in expensive vehicles through indirect channels.

“The government has created an impossible situation, that indirectly prevents the industry from progressing, while luxury items including CBU [completely built up] vehicles may continue to be imported at rather reduced taxes,” PAMA said.

“There are restrictions on opening of letters of credit, but those in the powerful circles can use other modes like making payment for the vehicles from any other country — possibly Dubai and importing the luxury cars or SUVs through the window when RD is not applicable,” he observed.

“At the same time the banks are allowing payments in dollars for import of vehicles,” Mr Waleed said while talking to Dawn and added that there were reports available to the industry players that after the termination of RD some influential were planning to import high-end vehicles.

He added that the local auto industry has already drawn the attention of the Federal Board of Revenue towards this issue and it will financially hurt the auto assembler as well as the vendors, and the RD has to be re-imposed at the earliest.

Published in Dawn, May 14th, 2023