The total number of old and used cars imported in Pakistan has drastically decreased to 10,432 during 2019-20 as compared to 46,000 during 2015-16, reflecting a decrease of 77.32% or 35,568 vehicles during the last four fiscal years.
This data, available with ProPakistani has been shared by the Secretary Auto Industry Development Committee (AIDC) of the Engineering Development Board (EDB) during the recent meeting of the committee, presided over by the Chief Executive Officer (CEO) EDB.
During the meeting, the senior manager of Indus Motor Company highlighted that month by month imports of used cars are increasing in the country.
Secretary AIDC highlighted that year on year imports have reduced from almost 46,000 in 2015-16 to 10,432 in 2019-20.
CEO EDB emphasized that industry should improve situation for availability of cars, reduce prices and consumer rights should be protected, sources quoted him as saying during the last meeting of the AIDC of the EDB.
Senior FBR officials told ProPakistan that the Federal Board of Revenue (FBR) has suffered massive revenue loss from low tax collection on the import of old and used vehicles during (2019-20) due to a change in import policy for secondhand cars.
According to a document of the FBR on factors responsible for affecting revenue collection during 2019-20, change in the import policy for used vehicles negatively impacted the FBR revenue by Rs. 22 billion (all taxes at the import stage) during July-January (2019-20) due to a change in import policy for secondhand cars.
In 2018, during the tenure of former Prime Minister’s Advisor on Finance, Revenue and Economic Affairs, Dr Miftah Ismail, the government had allowed the import of three-year-old used cars keeping in view the demand of importers.
Last year, the Economic Coordination Committee (ECC) of the Cabinet had revised the procedure for the import of used vehicles under personal baggage, transfer of residence, and gift schemes to clear vehicles that were stuck at Karachi port.
Prime Minister’s Advisor on Finance Dr Abdul Hafeez Shaikh on a proposal by Commerce Division had approved the import of used vehicles under personal baggage, transfer of residence and gift schemes, which requires the payment of duties and taxes to be paid out of foreign exchange arranged by Pakistani nationals themselves or local recipients producing proof of conversion of foreign remittance to local currency.
He allowed the importers to meet any shortfall in the arrangement of required foreign remittance for payment of duties and taxes through local sources in case of a scenario where the Pak rupee depreciates or the government increases the import duties and/or taxes after the receipt of remittance and before the filing of the good declaration, which results in a shortfall of remitted amount vis-a-vis payable duties and taxes.
The ECC decision helped clear up a total of 1,017 vehicles which were stuck at Karachi port because either no foreign remittance had been received or the remitted amount had been rendered insufficient due to the depreciation of Pakistani rupee before the filing or goods declaration or increase in the rate of duty in the Finance Act 2019.