The wheels have begun turning in the auto industry as Federal Minister for Finance and Revenue, Miftah Ismail held a meeting with Vice Chairman of Toyota Indus Motor Company (IMC), Shini Yanagi, at the Finance Division yesterday.
Ali Asghar Jamali, CEO of Indus Motor Company, and other senior officers from the Finance Division and Federal Board of Revenue (FBR) were also present during the meeting, which was called a day after the government’s tax hike recommendation for the auto sector.
Vice-chairman and CEO of Toyota IMC both apprised the Minister of the company’s contributions to Pakistan’s economy and industry. They also showed their concerns over the state of the economy and presented some proposals concerning the auto industry for the upcoming budget.
Yanagi and Jamali also told the ministry about Toyota IMC’s plans to locally assemble Hybrid Electric Vehicles (HEVs) in the near future. They requested the government’s support for the auto industry in the upcoming budget to sustain consumer prices and car sales.
Ismail welcomed Toyota IMC’s senior officials and said that the government is aware of the business community’s concerns and hurdles in business expansion. He claimed that the present government will offer a conducive environment to all industries in order to ensure seamless economic activity and growth.
He further stated that the upcoming budget will be business-friendly and will contribute to the promotion of exports. Ismail further assured the company representatives that they will extend their full support to the auto sector in the upcoming policies.
It must be mentioned here that Toyota IMC recently closed bookings for all cars due the unpredictable state of the economy.
Tax Hike Recommendation
Recently, FBR recommended a 100 percent regulatory duty (RD) hike on cars with over 1,300cc engine displacement. It bears mentioning that the majority of car companies in Pakistan do not have cars with less than 1,300cc engines in Pakistan. The new automakers, in particular, have only a few cars with small engines.
This implies that the taxes will likely increase on a majority of cars, which is likely to have a heavy impact on car sales.