Uniform taxation policy for auto industry demanded

* Motorcycles' production increases 353% in 10 years
Uniform taxation policy for auto industry demanded

KARACHI: The motorcycles' production in the country reached 1.7 million annually in the last decade from which the government earned huge revenue in terms of taxes but the sector is not being facilitated plausibly by the regime, dealers said.
The Association of Pakistan Motorcycle Assemblers (APMA) demanding level-playing field urged the government to implement uniform taxation policy for all local auto assemblers and importers in upcoming Auto Industry Development Policy (AIDP). 
It is important to mention here that motorcycle has become the most economical and affordable conveyance in Pakistan during the last decade as it could be judged that motorcycles' production increased enormously by 353 percent at the end of fiscal year 2012-13 (FY13) to 1.634 million units as compared to 360,558 units in FY04. 
The motorcycle production including locally made Japanese brand and Chinese made imported motorcycles' brand stood at 547,536 units in the first four months of FY14 while it was 545,211 units in the same period of last fiscal.
However, the government of Pakistan also has failed to take full advantage of this exorbitant increase in production in terms of revenue through duties and taxes as allegedly 4.0 million further Chinese made motorcycles besides legal statistics are being sold illegally across the country on annual basis.
APMA Chairperson Muhammad Sabir Shaikh told Daily Times that around 4.0 million of motorcycles are sold illegally in Pakistan due to which the national kitty is being deprived of huge revenue in terms of taxation.
He said that selling and smuggling of unregistered motorcycles continued in 2013. APMA has written many letters to the Federal Board of Revenue, Board of Investment and Engineering Development Board and also met with the concerned officials for ending this malpractice, but they did not bother to take any notice, he added.
He said that some black sheep in bureaucracy, having hands in gloves with motorcycles' smugglers and unregistered motorcycle sellers are taking huge amount of bribery for giving a free hand to the unsavory characters of our sector.
He said that the government can earn millions more revenue by stopping this anti-taxation exercise despite the fact the government, which is continuously taking serious action to broaden the tax net of this sector still has not become a priority of the new rulers.
The solution of all problems being faced by Pakistan's auto industry could be achieved through a two-point agenda of APMA, added Sheikh.
Instead of existing eight kinds of duties' structure, the government should bring only two types of duty structures through its new AIDP, he added.
He demanded uniform rate of customs duty on spare parts for all types of vehicles including motorcycles at 25 percent for all kinds of parts, localised, non-localised, assemblies, sub assemblies, components, sub component etc, for the after market and assembly of vehicles.
To encourage the new entrants in Pakistan, he said the government should apply 45 percent duty on all types of Completely Build Units including motorcycles. He further said, the duty structure for the Completely Knocked Down of new models or Semi Knocked Down units should be the same.
He said that this is the only way out to end corruption, smuggling, under-invoicing and nepotism in the automobile sector of the country. 
He said that motorcycles' registration and verification procedures are only followed in nine main cities of the country while the rest of Pakistan is not used to register motorcycles because of lax implementation of law there.
Due to this lack of concern by law enforcement agencies, the national kitty is continuously missing huge revenue in terms of taxes and duties as many local motorcycles assemblers do not show sale of unregistered motorcycles in tax documents, he added.

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