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Govt shuts down used car imports


News Desk |

Local car importers have expressed dissatisfaction over the Commerce Division of the government of Pakistan’s decision to term payment of the duty and taxes on import of new/used vehicles in foreign exchange mandatory.

Recently, in an attempt to control money laundering, the 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 of vehicles, Commerce Division of Government of Pakistan has made a major change in Import Policy Order.

The rest of the general public is dependent on buying five to 20-year-old used cars. Besides, 95 percent of the used imported cars are of 660-1000cc which have very good mileage on petrol. The 660cc vehicles are not assembled in Pakistan.

Data of the Pakistan Bureau of Statistics exhibits the imports of completely built-up cars (90 percent used cars) to have dropped by 43pc in the first half of the fiscal year 2019. The total imports were $156 million versus $277m in the corresponding fiscal quarter last year.

According to the order issued by the government, the remittance for payment of duties and taxes shall come from the account of the Pakistani resident citizen sending the vehicle from abroad and the remittance shall either be received in the account of Pakistani national sending the vehicle from abroad or, in case his account is nonexistent or inoperative, in the account of his immediate family.

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Quoting the former chairman Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPM) Aamir Allawala, a local media outlet said that the former official sounded optimistic about the move. “Used car imports will be eliminated and may become history.” He said that this decision would encourage local assemblers and vendors to make further expansions and investment without any fear of competition from used car imports in the future.

Auto Dealers had suffered heavy losses when the same decision was taken in 2017 due to which importers could not clear vehicles from the port from October 2017 to March 2018, GVS earlier reported.

Quoting another former official of APDMA, the outlet cited that the government had taken a one-sided decision without taking used car importers into confidence. “Used cars imports will see a sharp plunge in the coming months as the government has made future imports impossible,” he said.

Read more: Car enthusiasts rejoice as SHC slashes import duties on cars

According to statistics, almost one million vehicles are sold in the market on an annual basis in which local assemblers supply about 250,000 vehicles and about 70,000 are imported. The rest of the general public is dependent on buying five to 20-year-old used cars. Besides, 95 percent of the used imported cars are of 660-1000cc which have very good mileage on petrol. The 660cc vehicles are not assembled in Pakistan.

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