PAAPAM Demands Regulatory Duty on All Old and Used Cars

PAAPAM Demands Regulatory Duty on All Old and Used Cars

Islamabad, July 10, 2024 — The Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has called for the imposition of regulatory duty across the board on all old and used motor cars.

This demand was voiced by PAAPAM Chairman Abdul Rehman Aziz during a meeting with Federal Minister for Commerce Jam Kamal Khan on Tuesday, where representatives from the mobile phone manufacturing sector were also present.

During the meeting, the delegation discussed various issues impacting the local manufacturing of automobiles and mobile phones.

PAAPAM Chairman Abdul Rehman Aziz highlighted that the current regulatory duty (RD) structure is insufficient and called for a comprehensive approach to support local industries. He emphasized that 70% of used car imports, specifically those below 1,300cc, are currently exempt from the newly imposed RD in the Finance Bill 2024-25.

PAAPAM Chairman said in the budget for 2024-25, a 15% RD was introduced on imported used cars exceeding 1,300cc, following requests from local assemblers. However, this measure did not fully address the concerns of the local automotive industry as a significant volume of smaller motor cars continues to be imported without the regulatory duty. PAAPAM Chairman stressed that an across-the-board imposition of RD on all old and used vehicles is necessary to protect and promote the local automotive manufacturing sector.

Representatives of the mobile phone manufacturing industry, led by Aamir Allawala, also raised concerns during the meeting. They advocated for a ban on the import of old mobile phones to bolster the local industry. Additionally, they requested a specific rate for the General Sales Tax (GST) instead of the current 18% GST based on value. According to them, the value-based GST could lead to misdeclaration of values at the import stage, thereby adversely affecting the local mobile phone manufacturing industry.

Minister Jam Kamal Khan assured the delegations that their concerns would be addressed in consultation with the Ministry of Industry and Production, the Ministry of Finance, and the Federal Board of Revenue (FBR). He reiterated the government’s commitment to promoting ‘Made in Pakistan’ manufacturing and pledged all possible support to encourage local manufacturing of auto parts and mobile phones.

Khan also emphasized the importance of keeping export as a primary goal for the industry representatives. He noted that fostering a robust local manufacturing base is crucial for economic development and for enhancing Pakistan’s export capabilities.

The meeting concluded with a press release issued by the Ministry of Commerce, reaffirming the government’s resolve to address post-budget issues and support the local manufacturing sectors. The PAAPAM and mobile phone manufacturers expressed optimism that the government’s intervention would lead to favorable outcomes for their industries, thereby contributing to Pakistan’s economic growth and self-reliance.