To smash the smuggling trend and smugglers out of business the only solution is to curb smuggling by cut in custom duties on commercial import of motorcycle spare parts, All Pakistan Motorcycle Spare Parts Importers & Dealers Association suggested in its budget proposal for the year 2012-13.
The Association further pointed out towards serious and alarmingly growing problem of smuggling of motorcycle spare parts on massive scale from China through Sust Border and Afghan Transit Trade, this is because of the high rate of duty. The Association further proposed that additional duty should be removed and maximum custom duty on motorcycle parts should be 15 percent to 20 percent following H S Codes: 7315:1910, 8409:9111, 8483:5010, 8407:3110, 8532:3010, 8536:5021, 8714:1910, 9029:2011, 8483:9020, 8483:1012, 8483:6091, 8512:2010, 8544:4221, 8532:3010, 8714:1990, 8421:3110, 8481:8020, 8714:1920.
At present the importers paying custom duty at the rate of 35 percent, additional duty 15 percent, sales tax 19 percent, income tax five percent and federal excise duty one percent.
The Association pleaded that the excuse to keep high tariffs just to protect the local industry was not workable anymore as "we have seen the result by doing this for last 65 years." The Association pointed out that economy could grow four times more than the current economy because only 1/4th of the potential market is legally put into practice hence the government in return is only generating 25 percent of what they could actually be generating and was missing out on the rest 75 percent.