ISLAMABAD: The Federal Board of Revenue (FBR) has ruled out the existence of any proposed amnesty scheme targeting non-customs paid (NCP) vehicles, which comes at a time when dealers have been noticeably hiking prices across various categories over the past few weeks.

“There is no such proposal under discussion or consideration in FBR”, the spokesperson Afaq Ahmed Qureshi told Dawn on Monday.

The social media is flooded with false information that FBR is contemplating an amnesty scheme for vehicles. “These are nothing but baseless rumours,” Mr Qureshi stated, adding that the very notion of such a scheme is out of question while Pakistan is adhering to an IMF programme.

The government has taken strict action against unlawful money traders, smugglers and those holding local and foreign currency. As a result, the Pakistani rupee’s exchange rate against the dollar has dropped to around Rs277 per dollar. Previously, it had reached a record high of Rs335 in early Sept 2023.

Dealers raise prices across various categories

A tax official told Dawn that a coordinated effort is underway, particularly from dealers who have heavily invested in NCP vehicles in Balochistan, Khyber Pakhtunkhwa, and Gilgit-Baltistan, advocating for the amnesty scheme.

Back in 2010, a comparable amnesty scheme was introduced for such vehicles. However, the scheme was riddled with corruption and legal disputes, and it failed to effectively reduce the influx of smuggled vehicles or generate substantial revenue for the FBR.

Based on past experience, senior customs officials from the operations side, who wish to remain anonymous, said there is currently no consideration of an amnesty scheme to regularise NCP vehicles.

According to sources, despite resistance from the tax department, there’s a significant push from security forces to contemplate a scheme for the regularisation of NCP vehicles. However, this proposal faces opposition from the customs department. The matter was also recently brought up in a meeting of the Peshawar apex committee, added the sources.

Chairman All Pakistan Motor Dealers Association H. M. Shahzad told Dawn that the government should target those facilitating the transport of vehicles from Afghanistan. He pointed out that these vehicles, aged between five to 10 years, are entering via the Bandar Abbas port in Afghanistan.

Rather than cracking down on smugglers, he criticised the government for repeatedly considering schemes that primarily serve to legitimise undisclosed income, thereby causing a dent to national revenue collection.

Mr Shahzad said local manufacturers have also increased their prices unprecedentedly. He said there is a contradiction in government policies regarding the automobile sector.

The exemption for NCP vehicles in the merged districts of the former Federally Administered Tribal Areas (Fata), Provincially Administered Tribal Areas (Pata), Balochistan and GB is set to conclude on June 30, 2024. Initially, the exemption was due to lapse on June 30, but it was granted a one-year extension by the PDM government.

Published in Dawn, October 17th, 2023