ISLAMABAD: Pakistan Automobiles Assemblers Dealer Association (PAMADA) on Wednesday urged the government to look into the issue of misuse of used cars import schemes in Pakistan.
“The legislature ought to test the greatest obstruction to new speculation, abuse of stuff and blessing plans for imports of utilized autos. This abuse is likewise bringing about enormous misfortunes to national kitty”, said PAMADA Chairman Iqbal Shah.
He communicated his significant worry on the issue and said, “We have grave worries over the illicit and unchecked imports of utilized autos directly under the nose of FBR. The snuck and non-obligation paid engine vehicles are little piece of unlawful auto imports and if the legislature is not kidding to counter the income misfortune it ought to stop the abuse of utilized autos import plans. This is on account of it is expanding reliably, as more than 54,000 units were transported in 2015-16, when contrasted with 30,000 units in the comparing time frame a year ago.”
The numbers of used cars being imported under different schemes are still on rise, as more than 8,500 used vehicles were imported during just two months of the current financial year. According to reports, approximately 4,440 vehicles were imported in July this year and 4,076 were imported in August this year.
The break-up of imported vehicles in July and August showed that 4,471 vehicles below 800cc, 1,584 vehicles between 800cc and 1,000cc, 1,549 vehicles from 1,500cc to 1,800cc and 912 vehicles in the above 1,800cc category, luxury, SUVs, trucks and buses, and LCVs were imported.
Shah said that in the last 10 years, over 300,000 used vehicles have been imported into the country, capturing a prominent chunk of the market, while the surge of used cars is also responsible to some extent for the closure of plants of Hyundai, Nissan, Chevrolet, Fiat and Adam.
“The vehicles are imported, as a non-commercial commodity and then openly sold against hard cash in the market. At an average value of Rs 1.5 million per used car, this activity has generated grey economy of over Rs 80 billion in 2015 alone,” he added.
Another problem is that the custom levies on second hand vehicles are not applied ad valorem. Instead, a fixed amount in US dollars has been notified under SRO-577, which includes custom duties, sales tax and withholding taxes on an arbitrary and unknown basis, said PAMADA chairman.
“These fixed duties are highly suppressed, causing loss of tax revenue to the government. This also effectively subsidised imported used car, causing serious damage to the domestic auto industry. This fixed duty is calculated on less than half of the current market price of those cars, based on the monetary values that were set in 2005,” said Iqbal.
