The amnesty scheme to legitimise smuggled vehicles through duties and taxes has become trade for many as huge portion of them will be sold in local markets soon. According to the sources, as many as 50,852 vehicles have been legalised in just one month from March 5th to April 6th by Federal Board of Revenue (FBR) to earn Rs 16036.45 million.
This much influx of smuggled vehicles show that people used this favour in the shape of amnesty scheme as an opportunity to import vehicles and to sell them in local markets. Since only 7,324 confiscated vehicles were cleared by FBR. It shows that at least more than 40,000 vehicles were imported under this scheme for trading purpose. 'On the one hand, people used this scheme to legalise their smuggled vehicles and on the other, they get involved in trade of smuggled vehicles through legal means. Both ways, the loss is of the government in terms of national exchequer and damage to local auto industry,' said a top official of a local auto manufacturer, sources added.
According to a rough estimate the amnesty scheme has caused a loss of Rs 15 billion to national exchequer. The amnesty scheme, he adds, is benefiting only few influential and tax evading citizens at the time when the country requires a level playing field where the 'protected stakeholders' are also taxed similar to a common man. The amnesty scheme announced and trumpeted in a manner by the previous government as if it has brought in additional revenue whereas in fact it has only benefited some officials and tax evading citizens who should have been brought into tax net with penalties instead of amnesty.
The final and fixed tax regimes introduced decades ago as ad-hoc measure, coupled with the frequently deliberated 'amnesty schemes' create negative perception about the whole taxation system in the eyes of the honest taxpayer. The long-term objective of any tax policy must be to remove this perception at the earliest.
If instead of giving amnesty, these elements were penalised they would have resorted to buy regularly manufactured or imported vehicles through proper channels, which would have fetched huge revenue for the national exchequer, sources said and suggested that once these cars start landing in the market for resale the consumer who cannot differentiate will be made a fool easily as most of the cars will be sold with tempered mileages and snatched out gadgets. Since most of the cars have been rigorously used on off road tracks they are likely to give these customers a hard time.
The decision makers in the governments have failed to realise that the schemes like amnesty is eroding the benefits of low priced cars to the consumer. Sources further said that according to calculations, if 51,000 vehicles were to be assembled in the country, regular taxes, revenues on an average would have crossed Rs 25 billion. Currently, the car makers are producing vehicles from 800cc to 1800 cc in cars category while 2500cc mini truck is also being made which is very close to most of the smuggled categories.
The stats was astonishing as some of the world's most expensive and luxury vehicles were legalised under the schemes which includes Lamborghini Gallardo, Rolls-Royce, Mercedes-Benz S/E Class, BMWs, Range Rovers, Cadillac, Bentley, Jaguars, Ford Mustangs and other luxury SUVs like Land Cruisers, Prado, Lexus and Mitsubishi Pajero.
The duty, taxes paid by the owners on these super luxury vehicles were extremely low when compared with their prices globally, which is a cause of great concern for the general public, intelligentsia and law abiding citizens who is already struggling big time because of poor governance and mismanagement by the outgoing government and have lost hope on the democratic governments. The sad part is that such schemes are introduced by outgoing democratic governments only to benefit the elite class of this poor country who does not want to pay their fair share of taxes to the national exchequer, sources maintained.
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