ISLAMABAD: Succumbing to the pressure of local car manufacturers/assemblers, the government is all set to withdraw its decision of imposing 10pc federal excise duty (FED) on 1,700cc and above cars.
Although the auto sector welcomed the withdrawal of condition on non-filers for the purchase of vehicles and properties, introduced in the earlier supplementary budget, the imposition of FED was surprising for the assemblers/manufacturers, as they feared a decline in the sale of vehicles.
The Senate’s Standing Committee on Industries and Production on Wednesday was informed that the 10pc FED imposed on locally manufactured cars and SUVs, having engine capacity exceeding 1,700cc and above, would be withdrawn.
In his briefing to the Senate body, Advisor to the Prime Minister on Commerce Abdul Razaq Dawood said that the decision of imposing 10pc FED on 17,00cc and above cars was being revisited, as implications of FED on auto sales and its subsequent impact on revenue generation were being discussed. “We learn from experiences,” he added.
Privatisation of PSM
Meanwhile, on another issue, Dawood informed that six investors, three each from China and Russia, have expressed a keen interest to take over Pakistan Steel Mills. “We have told everybody that we are open to all and there will be transparency in all affairs,” he added.
The advisor said that the cabinet would decide about the future of the steel mills whether it would be privatised or revived.
“The government has already placed PSM in the list of entities under the privatisation commission,” the advisor said. “The best way is to introduce structural reforms in PSM even if it is to be privatised.”
Senator Kulsoom Parveen and Senator Sitara Ayaz opposed the idea of privatising PSM, whereas Senator Noman Wazir remarked “bureaucrats cannot operate businesses”.
Dawood criticised the former governments and blamed them for the prevalent crisis at PSM.
“Solid sludge of raw iron, as high as 13 feet, has been accumulated in the furnace, as PSM was shut down abruptly due to stoppage of gas supply by the previous government. There has to be a new system to replace the entire blast furnace,” he said. “Pakistan is broke – we cannot finance the revival and therefore private investment in PSM is imminent.”
He said that the government would separate the PSM land from production unit to cut off the interest of land grabbers.
The advisor further informed the committee that the report of an ‘experts group’ regarding viable solution and the future course of the steel mills would be presented to the Economic Coordination Committee on Monday, April 8th. Dawood said that the experts’ group would also present its report to the Ministry of Industries and Production on Saturday, April 6th.