In startling revelations, the government has imposed up to 500% more taxes on imported cars to protect the local car assemblers from foreign competition. In return, however, the assemblers have passed on the agony by overcharging consumers and delaying deliveries up to one year.
The revelations were made during a meeting of the Public Accounts Committee (PAC) – the Parliamentary watchdog – compelling the committee to recommend reviewing the undue protection helping the said companies in fleecing consumers.
The PAC recommended that the government withdraw the status of “manufacturers” instead calling (and treating) them as “assemblers” – a direction, if converted into law, will help lower protection levels enjoyed by the assemblers.
According to the PAC, protection is afforded via the imposition of
- custom duties
- additional custom duties
- sales tax
- additional sales tax
- federal excise duty
- income tax at rates that are far higher than charged on the import of parts for locally assembled cars.
Local assemblers enjoy 241% to 500% protection, revealed Mujtaba Memon, the Special Secretary of Commerce.
“Before the recent imposition of additional duties, the protection level was in the range of 100% to 390%,” he said.
