PAMADA proposes new tax to discourage high own rates

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The Chairman of Pakistan Automobile Assemblers Dealers Association (PAMADA) has proposed a transfer tax on purchase of new cars within three months of vehicle purchase.

The aim of the tax proposal is to control high own rates. The Chairman stated that investors tend to charge customers high own rates when they ask for early delivery of newly purchased vehicles. No premium would exist if the customers booked their vehicles and delivery is made as per the companies’ schedule.

He further informed that vehicles are now being produced after a customer places a requisition.  The industry is also making a transition towards one CNIC being able to order only one vehicle rather than the multiple that were allowed earlier. This will further curb the practice of charging of high own rates. He advised customers to book their cars at company authorised dealerships and wait for vehicle delivery until the tentative date of delivery.

Regarding the recent surge in demand for locally manufactured vehicles, Iqbal added that OEMs discouraged premium and concentrated on customer education campaigns through both advertisement and literature, but customers’ insistence for an immediate delivery rather than waiting for actual delivery is what encouraged investors to charge high own rates.

Representing the OEMs, Chairman PAMADA stated that all automakers in the country are currently operating at full production capacity to cater to the increased demand for automobiles. He highlighted that stable and consistent policies need to be drafted to encourage growth and allow entry of new competitors into the market.