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Billions lost in taxes due to used cars import halted

Since last year there had been some sort of instant growth in the car import sector, a lot of people took interest in it and thousands if not hundreds of people joined this business as well people enjoyed receiving a wide variety of cars with luxuries which the local market failed to offer.
However due to this recent amendment in the SRO 1067 issued by the Ministry of Commerce it has made the import harder if not significantly expensive.
Sources have reported, there are over 15,000 used second hand vehicles on the port of japan and 3000 are on the sea route to Pakistan. This scheme has brought a major loss for all the Pakistani car importers what once had become one of the fastest growing businesses in Pakistan. Not only has made it hard for importers here, car dealers in Japan are also in great difficulty because of this SRO. This amendment will make imported cars even more expensive as if they weren’t already inaccessible. It will stop all the current revenue inflows.

The SRO states that all vehicles that are imported either they are new or used to be imported under personal baggage or gift scheme, the import duty and other taxes on the vehicle must be paid through foreign exchange. This means now whoever imports a vehicle to Pakistan will have to arrange from foreign exchange or Pakistani nationals themselves supported by bank encashment certificate showing foreign currency changed to local currency.
A person importing their vehicle personally will not face that big of a problem they might be able to arrange it through relatives who live in foreign countries or such, But for Importers who do this out of a business perspective and import several cars at once how are they supposed to arrange thousands of dollars’ worth of cash.

It is also not understandable for a normal citizen as to why they would make this amendment since one was released already just a year ago in March 2016 and it also generates 60 to 70 billion rupees of revenue annually.

In a latest development Chairman APMDA met up with the Government officials in Islamabad to try and resolve this issue. What they have requested is to shift the date of amendment to 31st DEC 2017 so the consignments in between right now worrying dealers here and in foreign are cleared.
Hopefully we will get a more friendly policy from the Government!

by Ali Athar for AutoMark Magazine

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