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It’s been months, and the local car makers and vendors are crying over the increased influx of imported used cars in the local market. Days back, they complained and advised the incumbent government to maintain duties on the import of used cars as the loss to the country’s economy has reached Rs. 50 billion in the first eight months of the current fiscal year.
Increasing Regulatory Duty on Used Cars
Meanwhile, the Overseas Investors Chamber of Commerce and Industry (OICCI) also tax over the prevailing issue, underscoring the need to continue imposing regulatory and additional duties on these imports.
After a series of moaning and groanings at what the government is doing over the import of used cars, as per media reports, here is the anticipation of surging regulatory duty (RD) on these car imports in the upcoming federal budget 2024-25.
Reports have informed that regulatory duty on engine over 1800 cc may observe a jump of 30 percent taking it from previous 70 percent to the new 100 percent.
Similarly, there is also a proposal to impose a 15 percent duty on used cars up to 1800 cc. Nonetheless, the old and new hybrid cars will have no effect on this budget. Meaning that these cars will be exempted from the duty.
Surge in Import
Breaking down the data, Pakistan has observed a staggering increase in the import of used cars, clocking at 684% in the first half of first fiscal year against the same period last year.
It’s evident that there has been a significant rise in the import of various categories of used cars, including economy and small low-segment cars, commercial vehicles, SUV, vans, and even luxury vehicles. This surge can be attributed to the removal of regulatory duty on used cars up to 1800cc in the federal budget for the fiscal year 2023-24.
Additionally, in conjunction with competitive pricing, additional features come as another factor which pushes the customer towards imported cars compared to locally assembled vehicles.
What do you think about the anticipated surge in regulatory duty on the import of used cars? Is it justified when these features-loaded cars are far better than locally assembled vehicles in term of affordability and build quality. Drop your thoughts in the comments section.
