Carmakers to monopolise Pak market for another year.
by Ikram Hoti
ISLAMABAD, June 2: An eleventh hour intervention from influential lobbies has secured one-year extension to the auto industry’s privilege to monopolise the Pakistani market.
The government had planned and repeatedly asserted that this privilege available to them under the technology transfer (indigenisation and deletion) programme was to be scrapped through the Budget 2005-06.
The auto assemblers in Pakistan monopolise the industry as the new entrant could launch only by initiating the deletion, which is expensive, and the existing operators have already accomplished some of it. On the other hand, the bureaucracy’s privilege to monitor auto industry in Pakistan for ensuring correct indigenisation-reporting will also be extended by one year as the tax authorities have dropped the proposal to put all auto parts on the tariff list for import duty.
The extension has been secured in a rundown to the budget-finalisation and the Central Board of Revenue officials working on tariff listing of auto-parts for scrapping the deletion programme have stopped the exercise.
Questions put to the authorities concerned in this regard helped The News find out that it was the Planning Division, the Engineering Development Board (EDB) and top CBR officials that arrived at the decision to stop scrapping the notorious deletion programme that had been grossly abused to evade taxes over the past two decades.
These authorities have secured a breather for a cover-up of the actual deletion, which has been accomplished somewhere between 25-30 per cent on scores of auto parts but reported at 50-65 per cent, at the expense of the country’s treasury.
The EDB’s Indigenisation Committee has been responsible for monitoring the deletion for detecting misreporting of local part making and the one-year extension would mean allowing them the cover to keep the wrongdoing hidden, which could be exposed had the budget-makers put deleted items on the tariff list under the import heads. The budget-makers had started an exercise for putting the deleted items on tariff for stipulating a higher rate of duty on them in order to protect the local vendor industry. The non-deleted items were to be made importable at lower rate so that the local assemblers do not face hardship in importing quality parts.
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