KARACHI: No ban on import of used cars has been imposed and no plans are under consideration to completely close it, said Commerce Secretary Younus Dagha on Wednesday.
Imports of second-hand cars was being discouraged, not banned outright to prevent trade deficit spiraling out of control said Dagha while talking to Express Tribune.
To rein in imports, the government in October imposed regulatory duties on over 700 items which included luxury cars and other items. It believes used car imports contribute significantly to rise in imports, so the government decided to institute new conditions to rein in its imports.
The newly instituted rules require proprietors of all used and new cars to pay duties and taxes pushed and supported by bank encashment certification and providing conversion of foreign remittances into local currency.
According to the government, these newly instituted policies will rein in import of used cars in coming few months as this would only permit genuine overseas Pakistani’s to bring vehicles into the country.
But local automobile manufacturers have long decried the import of used cars, saying it has damaged the country’s economy besides taking out dollars from the local market.
Before the institution of this new policy for used cars import, these vehicles were imported via three schemes, transfer of residence, gift scheme and personal baggage. Importers say most of these vehicles are being brought into Pakistan under transfer of residence scheme and the other two schemes are rarely utilized for this purpose.
Industry officials said used automobile imports have plummeted due to institution of these new policies and vehicles set for import before the enforcement of this regulation weren’t impacted.
Majority of these used cars are imported from Japan and take 40 days to reach Pakistan via ship. The country’s yearly car sales have risen over 300,000 units, and 20pc of total sales are contributed by used car imports.
During financial year 2016-17, over 65,000 used cars were imported against 56,000 in FY 2015-16. Dagha added impact of new policies will be felt on used car imports by January 2018.
