Pakistan Automobile Manufacturers Association (PAMA) has expressed complete displeasure over Fiscal Budget 2020-21. The association believes that the government did not present any proposal to reduce production costs or to increase car sales in the country. PAMA Director-General Abdul Waheed Khan said that the auto industry was expecting a stimulus package. “The sector was hoping that government will at least slash unnecessary taxes including, Additional Sales Tax (AST), Additional Customs Duty (ACD), and Federal Excise Duty (FED) of 2.5-7.5%, depending on turnover tax and engine displacement,” Khan said.
The chairman further said the government did not even consider the association’s proposals regarding corporate tax, advance tax, or other essential steps. “The industry is currently going through its worst period as sales have dropped from 50% to 80% in different segments,” he said, adding that the auto sector’s revenue collection has seen a downward trajectory in the last 11 months. Khan said the industry has faced hardships due to the government’s regularly changing policies, demand collapse, exchange rate parity, and now COVID-19 pandemic.
Meanwhile, former chairman of PAMA, Mashood Ali Khan, also believes that the government has not given any relief to the ailing auto sector. “The ruling party must have slashed FED, AST and ACD to reduce the prices of vehicles but new budget has nothing positive for car manufacturers,” he said. Khan also said that the industry will see further hardships in future in the shape of sluggish demand and no assistance from the government.
It is essential to mention that Pakistan’s auto industry has sought a stimulus package from the government amid low sales, COVID-19, and nationwide lockdown during the last two months. However, the government has not taken any concrete steps over the demands as yet.
On June 12, Pakistan Tehreek-e-Insaf (PTI) presented fiscal budget 2020-21. The government has proposed applying FED on double cabin vehicles in Pakistan. In his speech, Minister of Industries Hammad Azhar said, the government has suggested 7.5%FED on locally manufactured, while 25% on imported double cabin cars.
