The government has decided to restrict and regulate the import of new and used cars in the country. The commerce division of government has amended the Import Policy Order and issued SRO No.52 (I)/2019 as a new guideline to import any vehicle in the country.
The decision has been made to curtail the dollar flow out of the country and to make sure that no one misuses the mechanism of personal baggage and gift scheme for the purpose of commercial imports of cars and other vehicles. Moreover, it will also end the menace of Hundi/Hawala currently prevalent in the Japanese cars import business.
According to the new policy, now it is mandatory to pay the customs duty and other taxes through the foreign exchange which will be endorsed by a Bank encashment certificate (showing the conversion of foreign remittance into local currency). It means that the tax amount paid for the said cars will be paid from external sources and not from within the country.
This import policy was initially designed for overseas Pakistanis but has been misused by the local dealers. However, now the government is trying to remedy the situation by altering the rules of procedure. Now no one is allowed to import cars in Pakistan on a single unattested copy of passport.
According to All Pakistan Motor Dealers Association (APMDA), almost 70,000 cars are being imported into the country annually. This huge Japanese cars import segment generates around $1 Billion for the government in the shape of income tax, levies, and import duties. Although the government could lose money temporarily, the induction of new rules will boost the prospects of Pakistan’s auto industry and the revenues for the government.
APMDA has its reservations over the new policy, and it has written a letter to PM Imran Khan to revert the policy. However, the local manufacturers and new entrants have welcomed the development and declared it beneficial for the consumers and businesses.