Monday , September 24 2018
Breaking News
Home / Business / PAMA for decrease in taxes to make low-cost cars
PAMA for decrease in taxes to make low-cost cars

PAMA for decrease in taxes to make low-cost cars

LAHORE: Pakistan Automotive Manufacturers’ Association in its budget proposals has proposed some tax measures to reduce the cost of locally produced vehicles and make these more affordable to consumers.

PAMA has said that 1% additional duty through amendment in SRO 1178(I) 2015 is negatively impacting the highly cost sensitive sector.

“By exempting the imports made under SRO 655(I)/2006 and SRO 656(I)/2006 from additional custom duty under SRO 1178(I)/2015, the government can help reduce the cost of vehicle being produced locally,” suggested PAMA.

Moreover, 5% to 30% regulatory duty on steel being imported under HS codes 72.08, 7209, 7210, 7213, 72.14, 7305 and 73.18 has been imposed. These steel items are basic raw materials of the auto industry that are not being manufactured locally and continued imposition of RD at such a high rate is rather unbearable as per vehicle Cost impact is around 3,000 ~ 5,000 rupees.

“It is proposed to include imports made under SRO 655(I)/2006 as exempt from regulatory duty under SRO 1035 (I)/2017, (RD notification) as such exemption has also been given to various other sectors under clause of the said SRO,” said PAMA.

PAMA also suggested amendment of Section 148 of income tax ordinance to reduce the withholding tax rate on import of raw material, plant and machinery back from 5.5% to 1% which was gradually increased over the years. Though rules for exemption certificate were introduced in Finance Act 2014 but stringent rules made it difficult to avail the facility. “The criterion for issuance of exemption certificate should be made more rational,” suggested PAMA.

Pama further suggested that withholding tax on the proceeds of exported good @ 1% should be reduced to 0.5% as recommended by the Engineering Development Board to make the exports more competitive in the international market and achieve export target.