The Overseas Investors Chamber of Commerce and Industry (OICCI) has put forward a proposal urging the reinstatement of regulatory duty (RD) and additional customs duty (ADD) on the import of used cars.
This move comes as part of the chamber’s recommendations for the upcoming budget for the fiscal year 2024-25, aimed at curbing the influx of imported used vehicles.
Highlighting the impact of the absence of these duties, the OICCI underscored that the effectiveness of SRO 1571/22 and 1572/22, which imposed RD and ADD on used cars, prevailed until March 2023. However, the subsequent non-application of these duties has skewed the import dynamics, making it more financially viable to import used cars rather than purchasing locally manufactured vehicles. Moreover, the entitlement of overseas Pakistanis has been exploited by traders for bulk importation of used vehicles, exacerbating the situation.
The rationale behind OICCI’s proposal is twofold: firstly, to sustain the growth of the local automobile industry, and secondly, to ensure a level playing field for an already struggling sector. By reintroducing RD and ADD on used car imports, the OICCI aims to incentivize consumers to opt for locally manufactured vehicles, thereby bolstering the domestic automotive sector.
In addition to reinstating regulatory duties, the OICCI has suggested imposing additional taxes on the onward sale of vehicles by beneficiaries of schemes meant for overseas Pakistanis. This measure seeks to discourage the misuse of such schemes for commercial gains, thereby channeling the benefits towards their intended recipients.
The proposal put forth by the OICCI aligns with the broader objectives of fostering indigenous industrial growth and promoting economic self-sufficiency. By discouraging the influx of imported used cars and incentivizing domestic production, the chamber aims to create a conducive environment for the local automotive industry to thrive.
As the government deliberates on the budget for the upcoming fiscal year, it faces the challenge of balancing the interests of various stakeholders while ensuring sustainable economic development. The OICCI’s recommendations serve as a valuable input in this process, advocating for policies that prioritize the long-term interests of the economy and foster a competitive business environment.
Ultimately, the implementation of measures to regulate used car imports is poised to have far-reaching implications, not only for the automotive sector but also for broader economic objectives such as job creation, industrial growth, and revenue generation. As stakeholders await the government’s decision, the outcome of these deliberations will shape the trajectory of the automotive industry and the economy at large.
