KARACHI: The automobile industry, which emerged as one of the leading contributors among the large scale manufacturing towards overall economic growth with plans to multiply production of all sorts of vehicles during next couple of years, has received a severe blow due to taxation policy. This policy allows a drastic cut especially on import of CBU in the country.
Since imported cars were comparatively cheaper than the ones manufactured or assembled locally, majority of the leading auto manufacturers like Indus Motors which produces renowned models of Toyota, Corolla and Cuore or Honda, Deewan and others have started importing CBU units.
According to industry sources, the duty on CBUs has been reduced almost to the bottom level from 75 per cent to 15 per cent up to 1000cc, 1300cc 15 per cent, 1300-1500cc 35 per cent, 1500-1800cc 45 per cent and 1800cc above 65 per cent.
Since the auto industry really has enormous potential to generate tremendous economic activity and has played a role model in the growth of developed economies of the world, the significant sector which can emerge as the engine of economic growth in Pakistan as well needs protection.
Though all leading car manufacturers have already geared up expansion of their existing plants, yet all of them are considering going into expanded trading activity into imported vehicles as well.
The auto industry, according to Pakistan Association for Automotive parts and accessories manufacturers, is well poised to produce 300, 000 cars, 3000, 000 motorcycles, 40, 000 tractors within next five years.
Although the government has decided to reduce duty on imports of car to bridge the gap between demand and supply, as the addition arrival of imported cars may ease the situation especially for timely delivery and root out the malaise of premium being extorted by the middleman and profiteers, yet it would ultimately affect growth of auto industry in the wider terms and in the long run.
In fact, the current chaos in timely delivery to the genuine buyers is due to a free for all situation encouraging resellers, investors, roadside dealers who are causing increase in delivery times for genuine buyers as the current registration regulations do not stop investors from charging premium.
The Indus Motors has suggested some corrective measures to discourage investors and the resellers which include detailed scrutiny of PBO, customer details and copies of NIC, only one vehicle should be allowed against one NIC. Indus Motors have further recommended that mandatory registration for all vehicles for 6 months in the name of original buyer.
