Pakistan to cut duty on imported cars
Islamabad, May 14:
Pakistan is considering a further 15-25 per cent cut in import duty on all makes and models of cars and jeeps in the upcoming budget. The cut is aimed at liberalising the auto sector to make it fit for the World Trade Organisation (WTO) regime when maximum import duty for all sectors will not exceed by 25 per cent and also to plug the gap in demand and supply, said informed sources.
Around 40,000 cars and jeeps have been imported during the first 10 months of the current fiscal, but the gap in demand and supply still exists. Similarly, liberal import has minimised the premium on locally made cars but it is still being charged on some popular models and makes.
The government is of the view that rationalisation of duty in the previous budget had worked well in reducing the gap in demand and supply to some extent, and also added to the revenue. Import duty collected by Central Board of Revenue on cars has encouraged the government to go for further reduction in budget.
In the last budget, the government had cut duty by almost 25 per cent for all categories. Cars up to 1,000 CC to 1,500 CC are liable to 50 per cent duty, those between 1,501 CC and 1,800 CC 65 per cent and more than 1,800 CC cars/jeeps 75 per cent. Drastic reduction in premium on cars is another outcome of the liberal import regime for the auto sector. The premium on locally made cars had been of great concern to the government. The local manufacturers are opposing any further reduction in duty on import of cars and have demanded a ban on the import of reconditioned cars in the budget.