Trade Policy 2008-09: NRPs may be allowed to import cars up to 7years-old

[Naveed Yaseen]

By Sajid Chaudhry
ISLAMABAD: A proposal is under consideration at the highest offices of the government to allow overseas Pakistanis to import 7 years old and used cars in Trade Policy 2008-09, official sources told Daily Times Thursday.

At present, the overseas Pakistanis are allowed to import only three years old and used cars and other vehicles, the import of which is not feasible for them as the prices of three years old cars are much higher in the developed countries.

A representative from auto industry also conformed Daily Times that this proposal was under consideration and he was of the view that the government should not allow this. The government should uphold Auto Industry Development Plan already approved by the Economic Coordination Committee (ECC) of the cabinet in the previous government’s tenure. In case the government allows the import of up to 7 years old and used cars under Transfer of Residence Scheme, Personal Baggage Scheme and Gift Scheme, the overseas Pakistanis would be having great opportunity to bring home cars that are in their use aboard.

This would also help them to import such cars and other vehicles on much less cost as the prices of 7 years old and used cars and other vehicles are much lower than the 2 years old cars in the international market. It would be a kind of incentive for the overseas Pakistanis who are contributing over $5 to $6 billion in shape of remittances to improve foreign exchange reserves of the country.

Federal government has increased the customs and taxes by 10 percent on the import of old and used cars and other vehicles under Transfer of Residence (TR), Gift Scheme and Personal Baggage by the overseas Pakistanis.

According to the understanding reached between automakers and engineering development board, it is suggested that depreciation limit would be reduced from 2 percent per month to 1 percent per month for customs duty assessment. This step would increase the cost of import of used cars and other vehicles and would encourage sales of locally produced cars and vehicles.

It is also expected that government would make mandatory for the returning overseas Pakistanis to keep their imported vehicles registered in their own name for at least one year. This provision would help discourage motor dealers who import vehicles in the name of overseas Pakistanis. The government has already withdrawn tax and duty concessions available on the import of old and used vehicles in the federal budget 2008-09. The total tax to be paid on such old and used cars includes customs duty, sales tax, withholding tax and sales tax.

According to the budget SRO 560 (i) 2008 on the import of old and used cars up to 800CC (Asian made only) duty and taxes have been increased from $4,000 to $4,400. Duty and taxes on cars up to 800CC (Other than Asian made) have also increased from $6,000 to $6,600. Duty and taxes on cars from 801cc to 1000CC duty and tax on such have also been increased from $5,000 to $5,500. Duty and taxes on import of old and used cars from 1001cc to 1300CC have been increased from $10,000 to $11,000. Old and used cars of engine capacity from 1301cc to 1500CC duty and taxes to be paid increased from $14,000 to $15,400. Taxes and duty on import of old and used cars from 1501 cc to 1600 CC also increased from $17,000 to $18,700 and duty and taxes on import of old and used cars from 1601cc to 1800CC (Asian makes only, but excluding jeeps) have also been increased from $21,000 to $23,100.

http://www.dailytimes.com.pk/default.asp...2008_pg5_1