ISLAMABAD: Auto part manufacturers have voiced discontent over the government’s move to offer tariff concessions on import of spare parts and accessories which are domestically manufactured.
Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) said the adding of the sector in free trade agreements (FTAs) would be against the government’s own policy, reported The News.
It said not only would this impede coming investment but would have negative implications for the industry.
Paapam said this in its budget proposals submitted to the government on Wednesday.
It emphasized the Auto Development Policy (ADP 2016-2021) approved by the Economic Coordination Committee (ECC) of the cabinet in March 2016, was the sole document governing the industry.
The association said giving concessionary custom duties in the FTA’s for localized parts was unfathomable, as it could cause the shutdown of the entire auto parts industry.
Paapam pointed out these FTA’s would deny the national exchequer of tax revenues from non-localized completely knocked-down parts.
It urged the authorities to remove anti-dumping and regulatory duties on auto engineering steel imports, which wasn’t being manufactured locally.
The association pointed out ADP has a thorough tariff structure for the industry, which got reported in the budget 2016-17.
In the ADP 2016-2021, one percent customs duty on imports of raw materials not manufactured locally has been levied.
Paapam said changing existing tariff rates by charging regulatory and anti-dumping duty on raw materials was unreasonable.
It requested the government to reduce corporate income tax rate to 25 percent which would be at par with regional countries.
Also, Paapam called for the rescinding of the taxes introduced by Finance Act 2017 which include 7.5 percent tax on profit before tax if a listed company does not share 40 percent of the annual profit in form of bonus shares or cash dividend.
The association called for the revoking of alternative corporate tax and minimum tax regime, which were backward and anti-industry.
And it highlighted general tax of minimum tax was increased from one percent to 1.25 percent in Finance Act 2017-18, which was contributing to effective tax rate being over 50 percent for some industrial sectors.
