New Tax Proposed To Curb High Own Rates in Pakistan

Chairman PAMADA (Pakistan Automobile Assemblers Dealers Association) proposed an additional transfer tax for new cars within three months of purchase. He suggested that this additional registration tax would help control the menace of high own rates.
“Investors tend to exploit customers with high own rates upon demanding early delivery of vehicles. If customers book their vehicles and secure delivery as per the schedule offered by companies, no premium will exist,” he said.
He added that vehicles are produced after individual orders placed by customers, and the industry plans to eliminate the menace of high own rates by stopping orders of multiple bookings on a single CNIC. He also urged the customers to book their cars at authorized dealerships and wait for their car to be delivered on the tentative date. Considering the recent uprise in demand for locally manufactured vehicles and essence high premium, Iqbal added that OEMs discouraged premium and ran customer education campaigns through both advertisement and literature, but the insistent behavior from customers for an immediate delivery against actual delivery encourages investors to charge own money. Speaking in the capacity of OEMs, Chairman PAMADA added that all automakers are working at their full capacity to meet the orders. Just like in 2007, we are at a breakthrough point, but back then the relaxation in the import policy adversely affected this industry. Thus to sustain this growth and bring in new auto manufacturers, stable and consistent policies need to be devised.


Notable Replies

  1. I believe there are two ways to control this. Take your pick.

    1. Ask consumers to only buy directly from the car assembler at dealerships and be patient.
    2. Govt should open tax/duty free import of brand new cars if local assemblers cannot meet demand. Either they invest and increase their output or the higher demand should go to import.
  2. Both are good suggestions. In fact no. 2 option is preferable. This will improve quality of local manufacturing as well.

  3. This is totally BS becasue car companies are already offering open invoice cars to investors. So this is not going to counter any thing.

  4. Not duty free. Atleast the duty / Tax being charged on local assemblers should prevail. Or else even local assemblers would start importing and selling cars rather then bringing in a CKD and assembling it here.

  5. Why can't they simply charge tax on capital gain on cars sold within a certain period, like 2 or 3 months of purchase? This will either eliminate the own money completely or increase it to a higher value, all depending on policies.
    Secondly booking of cars should be monitored by fbr to prevent discrepancies to prevent open invoice cars and others

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