The Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has stressed the need for providing a level-playing field to the tractors’ auto parts manufacturers. It has called for restricting import of parts which are being manufactured in the country, as under-invoicing and low valuation of imports have been hitting the industry hard.

In a statement issued on Saturday, PAAPAM Senior Vice Chairman Abdur Razzaq Gauhar invited the attention of the Federal Board Revenue (FBR) cChairman towards this issue.

He said undervaluation of imports by the customs authorities are turning the country into a trading hub by favouring commercial importers on one hand but on the other hand, it is affecting collection of federal taxes at the import stage.

Gauhar added that low valuation of imports of tractor parts has adversely affected sales tax, withholding tax, customs duty and federal excise duty. “A major reason for less revenue collection is the absence of a mechanism for accurate assessment of duties and taxes at the import stage.”

“Moreover, this is minimal increase in valuation of parts which was done after a long struggle by the manufacturers but our problems have not been fully addressed because these rates are still much lower than the actual value in the global and local market,” Gauhar said. He added that even an increase in locally manufactured alloy steel of over 30% during the last six months is much higher than the increase allowed in valuation.

Gauhar observed that Pakistan is a big market of tractor parts but instead of providing incentives to the local industry, that country has become a dumping yard of sub-standard parts from India and China.

“There is dire need to protect the local industry, which is not only one of the largest sources of revenue for the government but is also providing employment to millions of people,” he stressed. “The government should strictly discourage imports of those items, which are being produced at a domestic level.”

Published in The Express Tribune, February 14th, 2021.

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