Pak Suzuki’s demand for tax benefits, under the Automotive Development Policy 2016-21, has faced stiff resistance from international automakers.
Chinese, Korean and French automotive companies have opposed Pak Suzuki’s demand for Greenfield status in return for a $450 million investment in a new assembly plant in the country.
Suzuki had demanded the government to grant it Greenfield status under the ADP 2016-21 which only new investors can avail.
According to reports, Pak Suzuki’s move was widely criticized during the Auto Industry Development Committee (AIDC) meeting held in Islamabad on Wednesday.
A heated debate started during the meeting when all the new and existing players of the auto industry received a copy of PSMCL letter, that was also sent to the Prime Minister Imran Khan a day earlier.
In the letter, Pak Suzuki maintained that ‘if greenfield investment and incentives are given to Pak Suzuki for three years, then the company will invest in setting up a state-of-the-art Greenfield plant and introduce new and advanced models’.
The government had asked for feedback from the participants on Pak Suzuki’s demand.
While the existing auto companies like Honda and Toyota demanded the same favor for themselves if it was given to Suzuki, the new automakers opposed the idea and urged the government to continue with the same policy.
Ministry of Industries’ Secretary Azhar Chaudhary has said that the government was not considering any revisions in the ADP 2016-2021 at the moment, and even it did, it will take all the stakeholders into confidence including new entrants and it won’t be a party specific decision.
The policy also lets new investors import non-localized parts at a reduced duty rate for five years. Similarly, the companies can import localized parts at 25 percent duty.