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Smuggled cars to get amnesty

December 28, 2012

ISLAMABAD, Dec 27: Pakistan’s top tax machinery is giving final touches to an amnesty scheme for smuggled vehicles to allow owners of non-customs paid vehicles to legalise their cars with a payment of reduced duty and taxes, it is learnt.

“We have almost finalised the summary for the smuggled vehicles amnesty scheme”, a customs official told Dawn on Thursday, adding the summary will be submitted to Finance Minister Dr Abdul Hafeez Shaikh for approval.

The proposed amnesty scheme for vehicles will be the second in a row after the one that FBR had already introduced in the National Assembly for whitening of black money last week.

Customs official said that there are 100,000 smuggled vehicles mostly used by the influential people. But contrary to this data, the customs intelligence had collected data of 2.3 million non-duty paid smuggled vehicles.

“No one can stop these elite from using the non-duty paid vehicles even in the settled areas”, the official admitted, adding it was not possible for customs department with limited manpower to launch crackdown against smuggled vehicles.

The customs official argued that at least the amnesty scheme for vehicles will yield additional revenue for the government exchequer once for ever. “These cars owners had neither paid excise duty nor had paid duty and taxes at import stage”, the official added.

However, the proposed amnesty scheme for smuggled vehicles did not go well with the local automobile manufacturers who criticised the government for supporting any such move that would encourage smugglers to continue the illegal businesses.

Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) Chairman Munir Bana told Dawn that the FBR should launch a drive against the smuggled vehicles. He suggested prosecuting the smugglers and giving them exemplary punishment.

“All the smuggled vehicles should be confiscated,” Bana said.  He said the engine numbers of imported used cars were being used for registration of smuggled vehicles as there was no system for verifying their authenticity.

He said the engine numbers of local cars can be verified from the record of manufacturers.

Bana also criticised the government decision of allowing motor dealers association for importing used cars under the overseas Pakistani schemes.

“The import of used cars should be limited to owners and registered against their names”, he suggested.

FBR had already launched a drive against the non-duty paid vehicles especially in Balochistan. However, the senators from Balochistan have resisted the tax department confiscation drive of smuggled vehicles.

On the recommendations from Balochistan senators, the Senate Standing Committee on Finance had already recommended to FBR to consider an amnesty scheme for the non-duty paid vehicles.

The tax official said that customs department is working on the tariff that could be offered under the scheme. “We have to offer concessional rates of duties and taxes for regularisation of smuggled vehicles”, the official added.

Motors Dealers Association Chairman H. M. Shahzad also opposed the amnesty scheme and said the FBR should confiscate such vehicles.

He, however, pleaded his case for increasing the age limit of old car imports for the overseas Pakistanis, which he said will yield additional revenue.

He said government should establish a national database of all vehicles across the country.