KARACHI: During the fiscal 2013-14 ended June 30 this year the imports of used cars helped the exchequer earned revenue of over Rs 9 billion in customs duty which was half of over Rs 18.1 billion during fiscal year 2012-13.
The substantial reduction in the customs duty earning could be attributed to one solo factor- the substantial decrease in the number of used cars import.
According to statistics compiled by All Pakistan Motor Dealers Association (APMDA) during 2012-13 a total of 45,378 cars including 611 other/new vehicles were imported into the country the cumulative value of which was over Rs 25 billion.
But the volume of used cars import declined sharply by half in 2013-14 to less than half to a total 22,220 units including 35 other/new vehicles. The value of these imports also declined sharply to Rs 11.9 billion.
Of the 22,220 used cars imported into the country during 2013-14; 21,864 were imported under the Personal Baggage Scheme; 320 under the Transfer of Residence Scheme while just 1 used car was imported under the Gift Scheme.
Similarly, of the 45,378 used cars imported into the country during 2012-13; 44,150 were imported under the Personal Baggage Scheme while 613 and 4 units found their way into the country under the Transfer of Residence and Gift schemes respectively.
The commercial import of used cars into the country is not allowed and these cars find their way into the country through three different schemes, namely Transfer of Residence; Personal Baggage and Gift schemes.
Cars up to 1000cc engine power appears to be the most favourite type for imports- of the total 22,220 units imported in 2013-14; 16,193 were up to 1000cc while in 2012-13 over half or 26,525 cars of the total imports of 45,378 fell under this category.
Talking to Customs Today, the chairman of APMDA H.M. Shahzad said that the unfriendly policy of the government towards the import of used cars would result in further decline of used cars imports during this fiscal.
The increase in the rate of withholding tax at the time of transfer and registration of a vehicle along with an earlier reduction of the age of importable used car from five to three years and the reduction of depreciation to two years or 24 per cent would seriously discourage the imports of used cars, he said.
The volume of used car imports would also decline during the current fiscal, he added.