Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has strongly opposed any amnesty scheme for car smugglers and tax evaders and said such schemes would encourage smugglers to continue their criminal activities at the cost of domestic industry and national interest.
Talking to Business Recorder on Sunday on telephone PAAPAM Chairman, Munir Bana called upon the authorities to prosecute the car smugglers under the law of the land and give them stiff jail sentences, as amnesty coupled with simple levy of fines and penalties has never proved to be a deterrent.
Bana regretted that instead of taking preventive measures to check these smuggled vehicles, the government introduced amnesty schemes from time-to-time, thereby encouraging smugglers to continue their criminal activities.
Expressing his dismay at the ever-shrinking list of honest taxpayers in all sectors, Bana 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 emphasised that tax amnesty for smugglers of vehicles are acts of betrayal, which eat into the market shares of Automotive and Auto parts manufacturing industries, who are both 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.
Bana said that smugglers of vehicles are the main beneficiaries of this proposed amnesty scheme, as luxury cars are being cleared by paying nominal fee under these schemes, and damaging the local auto sector, which provides direct/indirect employment to over 2.5 million persons. In the past, similar tax amnesty schemes have also been abused by Pakistani tax dodgers to launder their untaxed money through state patronage and, under all such amnesty schemes so far, government has failed to collect even a fraction of the black money.
PAAPAM vice chairman Usman Malik lamented that the amnesty scheme will yield only Rs 12 billion for the government exchequer, while the government has ignored the fact that the local auto industry contributes over Rs 80 billion to the government treasury every year. He said that government only allows import of three-year-old used cars, but through this amnesty scheme, cars smuggled into Pakistan which are much older than three years can be legalised. 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. How the FBR can ignore a serious crime like smuggling simply by collecting penalties, he asked. He further said that there is no bar to issue notices, under sections 114 and 116 of the Income Tax Ordinance, to tax dodgers and smugglers, putting their assets including smuggled vehicles on auction for recovery of tax, besides prosecuting and putting them behind bars.
With regard to increase in the prices of locally assembled/manufactured cars and other vehicles during past five years. PAAPAM chairman Bana pointed out that it was due to depreciation of Pak Rupee against yen and dollar, hike in transportation charges, utility bills, wages and cost of production.
He said that localisation of auto-parts has benefited the nation but the acute energy crisis, long hours of electricity and gas load-shedding of have crippled the local parts and accessories producing units.