While the auto sector has pleaded that they were already overtaxed, the ministry of Industries and Production has maintained that the automotive industry has not been fulfilling their earlier commitments.
At the same time Industry leaders have warned the government that they were crossing Red Line on way to destroy the auto sector.
Chairing a high level meeting to discuss tariff issues related to the auto industry, Special Assistant to the Prime Minister, Haroon Akhtar Khan, highlighted that the government wanted to introduce policies to bring Pakistan’s automotive industry up to global standards.
The meeting discussed proposal by the government for reducing tariffs at importing the Completely Built Units (CBU), but the industry maintained that the government collects up to 56 percent taxes from the Industrial sector. and such a liberal import policy will only destroy the manufacturing.
The officials representing the largest motor company of Pakistan -Indus Motors, the makers of Toyota vehicles highlighted that they provide around 4,000 jobs and every year 120,000 cars are sold in the country.
Meanwhile, the delegation representing the auto parts makers stressed that the proposed reduction of duties to 15 percent on import of cars will negatively impact the Auto industry.Currently, the import duties on cars (CBU) range between around 60 percent to 197 percent for different categories. However, the officials informed that the government was considering tariff rationalisation in the auto sector, aiming to reduce the tariff and with the consideration that it would encourage competitiveness in auto sector.
The auto manufacturers were informed that they were failing to secure export orders and they needed to explain their position in disregard too, while the PAAPAM delegation was informed about the general feedback from the society that the quality of Pakistan made auto parts was much inferior to that of the imported ones.
However, Mr Haroon Akhtar Khan asked the auto assemblers and the auto parts makers to provide a report on how much protection they need by Saturday, May 24.
The meeting was attended by representatives from PAAPAM (Pakistan Automotive Parts and Accessories Manufacturers), officials from the Federal Board of Revenue (FBR), the Engineering Development Board, the Secretary of the Ministry of Industries and Production, Saif Anjum, and Secretary Commerce Jawad Paul.Mr Khan assured that the grievances of the auto parts industry would be formally presented before the Tariff Policy Board and directed PAAPAM to provide a detailed analysis of the level of protection the industry requires to remain competitive and sustainable.
He stated that incentives will be provided to those industries that demonstrate increased productivity and this step aims to encourage growth and enhance the performance of the sector.
