Sources said that the local cars and parts manufactures wanted revision in custom duties on import of used vehicles as per current vehicle prices increase in GST @ 17 percent and advance income tax. Pakistan Automobile industry argued that it is not against import of used cars if allowed with the conditions that allowable age of used cars to be kept below three years, allowable depreciation to be maintained @ 1 percent per month and realistic custom duties must be charged on used cars import.
They maintained that the duties imposed in 2005 are no longer factually reflective due to increase in Japanese used car prices, change in parity of Japanese -US $ in 2005 as compared to 2014.
The industry also stated that massive quantities of up to 20 year old heavy vehicles such as dumpers, bowsers as well as Tankers etc are being imported under various concessionary Statutory Regulatory Orders (SROs), which is impacting heavy vehicles sector and its vendors. Pakistan Association of Automobile Parts & Accessories Manufacturers (PAAPAM) proposed for fixing maximum age of three years for import of any type of heavy vehicle. The PAAPAM also wanted that it may be consulted for setting up the assessment values of such vehicles. The industry has also asked finance ministry to reduce the age limit of SUV (sports utility vehicles), which are still being imported from 5-year to 3-year to protect the local industry.
Sources said the industry also proposed that an additional 5% advance tax be imposed on vehicles if transferred by original buyer within six months to discourage premiums on cars and to discourage investors engaged in hoarding / booking vehicles and then earning premiums. The industry wanted the government to allow corporate buyers to adjust input tax on purchase of vehicles with the purpose of expanding the corporate sector's volume.
Sources said that the industry also wanted 10 percent rate for sales tax on tractors manufactured in Pakistan instead of current rate of 16 percent. The industry stated that the tractors in Pakistan were exempt from sales tax till 2011, but after then the government imposed a sales tax of 5 percent, 10 percent & 16 percent from January 2012, January 2013 & January 2014, respectively.