KARACHI: The ministry of finance may further reduce customs duty on the import of new cars while special preference will be given to cars imported from the European countries, sources in the automobile industry told Daily Times.
A source said: “The ministry has finalized a summary of new custom duties on the import of cars.” “This new duty structure would be announced soon after the return of Prime Minister Shaukat Aziz from Brussels.”
According to the proposed duty structure, the source said, the ministry of finance and the Central Board of Revenue (CBR) has proposed a maximum reduction of up to 25 percent in custom duty on 800cc cars to 1800cc cars.
Currently, car dealers are paying 82 percent duty on 800cc car and 120 percent duty on 1800cc cars. According to the break-up, dealers are paying 50 percent custom duty, 15 percent sales tax and six percent income tax, while on big units of up to 1800cc dealers are also paying 3.75 percent to 7.50 percent capital value tax (CVT) per unit.
The source the summary has also suggested allowing the import of new cars to meet the rising demand of automobiles in the country.
The prime minister along with Humayun Akhtar, the federal commerce minister, are in Brussels to hold talks with the European Commission on the issue of anti-dumping duty on Pakistani home textile products especially bedlinen and extension in the general system of preference (GSP).
Europe seeks access: Industry officials said now the European countries have asked the government to allow European automobiles in the country.
“The government is apparently ready to give them access into Pakistani market in return for certain concessions for Pakistani exporters in the European countries,” said a source.
Meanwhile, private car dealers are also demanding of the government to immediately lift the ban on the import of new and used cars so that they can fulfill the demand of automobiles in the country.
According to the Pakistan Automotive Manufacturers Association (PAMA), production of cars has registered a growth of 29.8 percent to 56,671 units in the period from July to December. While sales of cars rose 31.8 percent to 57,010 units during the period under review as compared to same period last year.
The manufacturing units and assemblers produced 56,671 units during last six months, out of which they sold 57,010 units, which shows the demand of cars is up during this period.
Dealers said the demand of cars is increasing due to availability of financing facilities from the commercial banks and leasing companies and that the local automobile industry is able to meet the rising demand.
They said there would shortage of up to 60,000 units in the current fiscal year against the expected demand of 150,000 to 175,000 units of big and small cars.