KARACHI: Car imports fell 42 percent to $209 million in the first nine month of the current fiscal year of 2018/19 as restriction on non-filers to own vehicles and weakening rupee discouraged importers, analysts said on Thursday.
Car imports – in completely-built-unit shape – stood at $359.5 million in the corresponding period a year earlier, the latest Pakistan Bureau of Statistics (PBS) data showed. In March, car imports slid 80 percent year-on-year to $6.1 million.
Customs authorities said customs clearance of motor cars is standstill at present due to restrictions imposed by the government.
The government, in the budget 2018/19, imposed restriction on non-filers of income tax returns to register imported vehicles with provincial motor vehicle authorities and purchase of locally-assembled cars.
The present government, in its first mini-budget – Finance Supplementary (Amendment) Bill 2018 – made some efforts to withdraw the condition on non-filers, but due to opposition from stakeholders the condition was retained.
The condition was, however, relaxed for overseas Pakistanis and they were allowed to get registration despite being non-filers.
The government, in the second mini-budget – Finance Supplementary (Second Amendment) Bill 2019 – in January allowed non-filers to purchase locally-assembled motor vehicles of any engine capacity.
The condition was relaxed on the demand of local car assemblers, which witnessed sharp decline in sales. The condition on imported cars remained the same with a condition of customs clearance in foreign currency.
Commercial car imports are still not permitted. They can be imported under transfer of residence, personal baggage and gift schemes. The ministry of commerce, in January, stipulated that duties and taxes on all vehicles in new/used condition should be paid in dollars.
“The remittance for payment of duties and taxes shall originate from the account of Pakistani national sending the vehicle from abroad,” the commerce ministry said. “The remittance shall either be received in the account of the Pakistani national sending the vehicle from abroad or, in case, his account is non-existent or inoperative, in the account of his family.”
The customs authorities said the condition was to curb misuse of import schemes. They said a huge stock of imported cars is at the ports as people are unable to get them cleared due to the restrictions.
Another major factor, which discouraged car imports, was rupee depreciation. Cost of cars increased manifold because of massive decline in local currency. Car imports have witnessed consistent growth during the past three years and resulted in huge outflows of foreign exchange from the country. Car imports amounted to $456.19 million, $431.46 million and $325.62 million in 2017/18, 2016/17 and 2016/15, respectively.