KARACHI: All Pakistan Motor Dealers Association (APMDA) has demanded of the government to allow commercial import of cars, as it is already allowed for the Japanese automobile assembler.
In a letter send to Prime Minister Secretariat in Islamabad, H.M Shahzad Chairman All Pakistan Motor Dealers Association (APMDA) said SRO No. 52 (1)/2019 was issued by the Commerce Division without taking all stakeholders into confidence and it would have more negative repercussions on national exchequer instead of any increase in revenues for the government.
Commerce Division of Government of Pakistan vide SRO No. 52 (1)/2019 has made am amendment in Import Policy Order whereby it has been made mandatory that all vehicle in new/used condition to be imported under transfer of residence, personal baggage or under the gift scheme, the duty and taxes shall be paid out of the foreign exchange arranged by Pakistan nationals themselves or local recipient supported by bank encashment certificate showing conversion of foreign remittance to local currency.
“It has been explained that the purpose of this SRO is to curb money laundering, outflow of foreign exchange through Hundi/Hawala and misuse of the mechanism of transfer of residence/personal baggage and gift scheme for the purpose of commercial imports. In principle, we support any revision In the Import policy which is In line with the national Interest of our Pakistan,” H.M Shahzad said.
However, this SRO was issued without taking all stakeholders into confidence, he said.
APMDA letter notes at the outset it is necessary to understand that almost one million vehicles are sold in the market annually. Local assemblers supply about 250,000 vehicles and about 70,000 imported vehicles.
The rest of the public is forced transact 5 to 20 year old cars. Besides, 95 percent of the used imported cars are of 660 to 1000cc. These cars are highly economical and give 25 KM to a liter of fuel; moreover, these are not assembled by any local manufacturer. These cars fulfill the needs of the sender’s family as well as the local market.
Transfer of residence, personal baggage or gift scheme is the only mechanism through which import of new/used vehicles are permissible in Pakistan. In absence of any other means for import of vehicles, by virtue of this SRO, import of vehicles which generates revenue of around $1.0 billion annually for the government in shape of import duties, levies and income tax is likely to be shut down completely; consequently, revenues will also reduce to zero.
It is common knowledge that Toyota has increased prices by Rs600,000 during last two years while Honda prices have increased by Rs700,000 and Suzuki by Rs300,000 in the same period. In absence of any alternative for the import of vehicles, the public will be completely at the mercy of the local assemblers who will be at liberty to sell their products at more exorbitant prices in the absence of any competition.
Moreover, due to limited production capacity of local assemblers, the own-money or premium over the actual price of a vehicle which is up to its Rs250,000 will also increase manifold.
Employment of hundreds of thousands of peoples is dependent on the business of import and sales of vehicles. Imposition of the restriction laid down in the SRO under reference will almost eradicate the import of vehicles and it will result in huge increase in unemployment in the country.
H.M Shahzad said if the government was convinced that the present schemes are being misused, then commercial imports may be allowed so that these people may continue to earn their livelihood. “The local assembler is already allowed to import new vehicles so why this is denied to other business enterprises,” APMDA chief said.
“It is humbly requested that a meeting with the All Pakistan Motor Dealers Association may be convened at the earliest with the relevant officials of Ministry of Finance so that a more practical solution may be arrived beneficial for government as well as people of Pakistan,” the letter said.