Auto industry Laments Imposition of New Taxes

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The local auto industry has lamented the imposition of new taxes on locally assembled cars and called it a deviation from the Automotive Ind­ustry Develop­ment and Export Plan (AIDEP) 2021-26 while also criticizing the import of used cars.

In a letter to the Ministry of Indus­tries and Production, the local auto vendors and the spare parts manufacturers have said that the duties and taxes imposed recently in the supplementary financial bill (mini-budget) on the auto sector was unfair and could lead towards a serious crisis for the automobile assemblers as well as the vendor industry.

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Syed Muhammad Ishtiaq, CEO S.M. Engineering has demanded the government to stick to the AIDEP and refrain from changing it after intervals, as it creates a lack of trust between the investors and the country. While talking to media persons he said:

“The auto sector is a long-term based industry and needs stable policies but the government has deviated from the official policies. But at the same time the issue of importing used car was gaining momentum and that too needs immediate attention from the authorities.”

Mr Ishtiaq said that last year alone over 27,000 (used) vehicles were imported, blatantly misusing the gift and baggage schemes and depriving the economy of foreign exchange. He said that the auto sector has forwarded the request to the government that despite high imports, the duties on used cars have not been increased. Mr Ishtiaq added that:

“The low duties on import of used vehicles will encourage the exploiters to further dent the economy and discourage investments in the local industry.”

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According to Mr Ishtiaq, the surging import of used cars is to some extent responsible for the closure of Hyundai, Nissan, Chevrolet, Fiat and Adam plants in the past. “We are already facing the brunt of rupee devaluation and additional duties, while the misuse of imported used cars schemes will be very detrimental for the industry”, he concluded.

Source: Dawn

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