PAMA Calls For Imposing 15% RD on Import of Used Cars

Staff Report

Pakistan Automotive Manufacturers Association (PAMA) has recommended to impose a 15% regulatory duty on the import of used vehicles in the below 1300 cc category, while maintaining the current rate of 15% regulatory duty on vehicles above the 1300 cc category.

In a letter sent to Federal Minister for Industries, it said that they had been consistently drawing the Government’s attention to the phenomenon of the import of used cars, which has increased by 600% in recent years compared to previous years. This surge has resulted in the lowest ever production and sales figures.

We were very hopeful that the Federal Budget 2024-25 would introduce strong measures to contain this illegal trade that is flourishing unfairly by exploiting the privileges exclusively granted to overseas Pakistanis under the Import Policy,” it said.

Though a 15% regulatory duty has been imposed on the import of used vehicles through the Finance Act, effective July 1st, it only applies to vehicles in the above 1300 cc category. Unfortunately, the segment below 1300 cc engine capacity has been omitted.

It is important to note that customs import data for the period from January to May 2024 indicates that about 62% of the aggregate import of used cars pertains to the below 1300 cc category.Pakistan Car Sales touched 17 months high in May-2024

To sustain the growth of the local industry and achieve the targets set under the Auto Policy 2021-26, and to protect the industry from unfair competition posed by the import of used vehicles (specifically in the below 1300 cc category), we propose the following recommendations,” PAMA said.

Additionally, PAMA has urged to Update SRO 577 (I) 2005, which has become outdated since it was last updated in 2015. Currently, taxes are levied on taxable values prevailing at that time, causing a significant loss to the exchequer. It is now necessary to update this SRO to reflect current prices.