Commerce Minister Engineer Khurram Dastgir Khan has said that used cars do not create employment in the country. In a recent interaction with the local auto industry, he said the government will have to strike a balance between the interests of consumers, assemblers, auto parts manufactures and local workforce. Commerce Minister''s comments on used cars before unveiling of new Auto Policy indicate that the government will further tighten import rules for used cars in the policy.
Used cars are being imported in the country from Japan and other countries by misusing Commerce Ministry''s three schemes ie transfer for residence scheme, gift scheme and personal baggage scheme. Presently, Chairman Privatisation Commission (PC) and Khurram Khurram Dastgir are actively engaged in preparation of a new five-year auto policy because the convenor of the Auto Policy committee, Khawaja Asif has almost dissociated himself from its formulation.
Commerce Minister has also held separate meetings with cars assemblers and auto parts manufacturers prior to presenting the policy in the Economic Co-ordination Committee (ECC) of the Cabinet. Well-informed sources told Business Recorder that Secretary Ministry of Industries and Production (MoI&P), Raja Hasan Abbas, who is also holding acting charge of Chief Executive Officer (CEO) of Engineering Development Board (EDB), discussed the new auto policy with EDB officials.
Sources close to Secretary Industries told Business Recorder that the officials working on the Auto Policy have expended most of their energies on adjustment of tariffs for the CKD and local parts. According to sources, proposed tariff on CKD kits will be around 30 percent, it will be 45 percent on local parts. "All stakeholders will agree on 30 per cent on CKD and 45 per cent on local parts. Federal Board of Revenue (FBR) will also not resist it," the sources maintained.
Currently, FBR is sticking to customs duty of 32.5 per cent on CKD kits and 50 per cent on local parts. However, local assemblers and auto parts manufacturers have already rejected FBR stance and held meetings with the policymakers warning that the local industry is in dire financial straits due to existing taxes and any new taxes would sound its death knell.
Chairman Privatisation Commission, sources further stated, has made his mind to ban production of Suzuki Mehran and a couple of other obsolete models. However, local parts manufactures are advocating the case of Suzuki Mehran, saying that it is a better option for those who use motorcycles for their families. The EDB, sources said, has solicited comments from all the concerned Ministries on the new Auto Policy and attached it with the summary and recommendations on which the ECC would decide.
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