Ever since the government of Pakistan issued the SRO1067(1)/2017, used car importers have been in a constant muddle as thousands of cars are still stuck at the ports awaiting clearance.
Automobiles make up a majority of Pakistan’s total imports, and the SRO was implemented to balance out the trade deficit by controlling the massive surge of imports. But in doing so, importers and buyers have been awestruck with the massive increase in taxes.
Commercial Imports
One of the main reasons for this implementation was to discourage commercial imports. It’s true that Pakistani residents have been resorting to imported vehicles for a long time now and most car imports are made for commercial purposes. This leaves a bad impact on Pakistan’s economy because all the money goes offshore and the authorities are only able to extract revenue from insubstantial customs duties.
In Pakistan or any other country, one of the largest contributors to the economy are car companies because vehicles are always in high demand and come at high costs; the tax paid on these vehicles is a hefty figure and if the citizens don’t buy from local brands, this tax element is technically wasted and paid to companies residing offshore.
A Massive Deadlock
The implementations have caused a number of vehicles, including those ordered by civilians for non-commercial usage, to be held uncleared and locked at Pakistan’s ports. The importers, according to local media, have halted around 6000-7000 vehicles due to non-payment of taxes. Their demand? The new policy’s withdrawal so that they can continue importing vehicles, and maintain considerable revenue, commercially.
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The government, however, has something else in mind.
Recently, the Federal Board of Revenue (FBR) officials relaxed the custom duties on imports classifying as gifts, personal baggage, and residence transfer schemes, however, only temporarily. But here’s the catch, these exemptions were only granted to vehicles which were ordered before the policy change and the issuance of the aforementioned SRO. This was to clear the 6,000 vehicles which were ordered by ordinary citizens for their personal use.
Moreover, the exemption, in order to be granted, required the importers to verify that their transactions were non-commercial – they had to prove that the payments were made from bank accounts of Pakistani nationals. Dr. Miftah Ismail, an advisor for Finance, Revenue, and Economic Affairs suggested an immediate release of the blocked vehicles so that general consumer-base importing vehicles non-commercially can avoid difficulties.
Used cars are not a burden on the economy as an oversea Pakistani purchase tge car from abroad with the money they havewith them nand send it to Pakistan. They send the car here instead on money an when the car comes here the money comes or the value of the money comes here and also the car is registered in customs and excise department which tax taxes and yearly excise taxes. And then there are many people involved in this trade as port drivers clearing agents and their office staff, car dealers and their office staff, denters , painters, mechnic, labour, spare part dealers, landlords of the property which all these people have rented, taxation departments all the the subsidiaries. Therefore its a very big step which the government has taken aganist a lot of people and its invisibly harming a lot of people. On the other hand the public suffer as their demand is not met as there is shortage in market which in turn allows local manufactures to charge high prices. Also this trade provides huge revenue to the government. Therefore for the betterment of the public the government should allow used car imports and make an easy procedure and allow 10 years imports so that the masses in the public benifit.
I agree with your comments, on the downside adding more vehicles on the current roads is only increasing the traffic congestion problems.
On the plus side – more cleaner cars
New cars are more environment friendly than those currently on Pakistani roads coming from 70s and 80s even.
I personally know of importers importing hundreds of car, using passports copies of expatriate Pakistanis. I also know lots of people importing cars and selling them. They send out dollars to purchase these cars. So its not entirely true that expatriate Pakistanis are buying these cars.
Since this is now being used as a business, it should be taxed accordingly. Furthermore, now auto makers will only come in the country provided they can be sure their products won’t be undercut by grey market cars.
Also automakers making sure that they adhere to International standards just like in other countries, not selling teen dabbaa for a million pkr
Only a copy of passport is sufficient to import a car?
Like seriously?
I am an overseas Pakistan and would like to export one to Pakistan :)