Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) while appreciating the FBR's plan to launch a national drive against non-duty paid smuggled vehicles, asked the authorities to also prosecute the car smugglers under the law of the land and give them stiff jail sentences, as simple levy of fines and penalties has never proved to be a deterrent.
PAAPAM Chairman Munir Bana in a statement said the smugglers use engine numbers of imported used cars for registration of smuggled vehicles, as there is no system for verifying their authenticity. Engine numbers of locally assembled cars can be verified from the assemblers' records, he added.
He said that the customs intelligence had collected data of 2.3 million non-duty paid smuggled vehicles, which is just 15 percent of an estimated 14 million smuggled/non-registered vehicles all over the country. The government, instead of taking preventive measures to check these smuggled vehicles, introduces amnesty schemes from time to time, thereby encouraging smugglers to continue their criminal activities.
Similarly, expressing his dismay at the ever-shrinking list of honest taxpayers in all sectors, he said that amnesty schemes should not be used as a measure to raise revenues, as these discourage honest taxpayers and create distrust in state institutions.
The PAAPAM Chairman was of the view that tax amnesty and money-whitening schemes for smugglers of vehicles are acts of betrayal, cheating the auto industry, who are fully documented and also amongst the highest and most honest taxpayers. "We want to remind the government of its solemn promise made to the Parliament in 2008 that after Tax Investment Scheme it would not introduce any more amnesty schemes" he added.
He said that tax amnesty scheme protects tax evaders as they whiten their untaxed money simply by paying a small premium to money changers for arranging remittance in their names. Moreover, smugglers of vehicles are the main beneficiary of such schemes, as majority of luxury cars are cleared by paying nominal fee under these schemes, and damaging the local auto sector, which provides direct/indirect employment to 1.8 million persons.
All amnesty schemes have been abused cleverly by Pakistani tax dodgers to launder their untaxed money through state patronage, he added. Under all the tax amnesty schemes government failed to collect even a fraction of the black money. How the FBR can ignore a serious crime like smuggling simply by collecting penalties, asked PAAPAM Vice Chairman Usman Malik. He said that parliament instead of entertaining an amnesty scheme should seriously consider introducing 'Asset-seizure Scheme' to confiscate untaxed assets as well as non-duty paid costly vehicles purchased from undisclosed money.
He said the amnesty schemes introduced by the FBR in the past failed to yield positive results. A scheme was launched during the Musharraf regime in 2000-01, and the FBR collected only Rs 10 billion. Another scheme which was launched in 2008 fetched just Rs 2.5 billion.
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