Motorbike assemblers seek uniform Customs valuation

Low-priced two wheelers

KARACHI: The Association of Pakistan Motorcycle Assemblers (APMA) has demanded the government to provide level-playing field for assemblers of Chinese motorcycles, as the present policy is making low-priced bike makers uncompetitive.

In its budget proposals for 2017/18, the association said the SME sector and low-priced bike makers and their vendors need government support, as some issues are still unresolved.

The policy 2016/21 on auto sector has not covered Chinese-based small bike assemblers and their vendors, it added.

Only a few Chinese bike assemblers are doing satisfactory business, while others fail to enjoy good sales due to competitive prices, tax evasion, lack of uniform policies and registration of all dealers / retailers in the sales tax at retail stage, the association added.

Muhammad Sabir Shaikh, chairman of APMA, said that the government should evolve a uniform policy on valuation at the import stage for different raw materials and components and all kinds of units and assemblies.

“Uniformity in valuation will curb under-invoicing, misdeclaration and smuggling,” he said. This will also eliminate five to 10 percent illegal money, which is demanded by the Customs officials at the time of clearance, he claimed.

A number of concessionary SROs should also be abolished immediately.

“Uniform rate of Customs duties will encourage industrial and business activities, open new job avenues and control tax evasion,” the association suggested.

It also proposed that all the traders are selling made-in Pakistan goods and imported items on which sales tax was already applied; therefore, “They should be registered in the sales tax regime.”

“The sales tax evasion cannot be controlled without registration of all the retailers who are selling sales tax paid goods and imported items,” Shaikh added.

The rate of sales tax at 17 percent should be reduced to 15 percent and the sales tax on the retailers, who are still not registered in the sales tax regime, should be increased to 20 percent from the existing 19 percent.

He said the lack of uniform policy in valuation, Custom duties and non-registration of retailers in the sales tax caused around 80 percent of the SME units to close down.

These closed units can be reactivated through change in policies, which would create new job opportunities. The government has not changed any policy on the two-wheeler segment in the last three budgets, he added. The chairman urged the government to carry incentives and concessions for the general public.

“The new budget should also focus on two-wheeler industry,” he added.

He urged the government to take notice as to why only a few bike assemblers are doing a roaring business, especially one leading Japanese bike maker whose production and sales is above 40 percent of the total bike market.