Islamabad – A new import policy which was presented in October 2006 is good news Pakistani nationals living abroad.
The revision allows for the import of three year old used cars as opposed to the current two year old vehicle restruction. Also, the importation regulations have been simplified to allow easier processing of imports.
The amendments are:
(i) Under the gift and personal baggage schemes, vehicles up to three years old will now be importable.
(ii) Under the gift scheme brothers and sisters will also be eligible, besides the parents, husband, wife and children.
(iii) It will no longer be required that the vehicle be registered in the name of the Pakistani national prior to its import under the personal baggage or transfer of residence scheme.
(iv) Overseas Pakistanis holding Pakistan origin card will also be eligible to import vehicles under the gift, personal baggage and transfer of residence scheme.
(v) Right and Left hand drive vehicles are now eligable for import to Pakistan.
The policy change also tackles the many types of malpractice, manipulations and exploitation of consumers that has been going on for years.
The Pakistanki automobile industry was on the offensive about the changes. The PAMA (Pakistan Automotive Manufacturers Association) and the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM)said that it would be a massive setback for the country’s native manufacturing plants.
“Relaxing the import regime for vehicles would prove a setback to the local car makers as well as local vendors,” says PAMA chairman Kunwar Idris. He also mentioned that about 135,000 people involved in the industry.
Meanwhile the chief of the PAAPAM, Mehdi Ali Rizvi, said that the supply side of the automotive industry would decrease and that he and other investors are considering plans to halt investment.
The Government replied by dismissing the allegations against the rule changes. Commerce minister Humayun Akhat Khan said all the government did was to change the procedures to give relief to middle income earners who could now get cars at affordable prices.
Under the rules for foreign resident Pakistanis, imports of used and new cars are permitted on transfer of residence, gift to immediate relatives and for stay abroad extending beyond six months. The new rules simplify these processes and tackle malpractices and loopholes in the laws.
Since left-hand drive system is in vogue in most parts of the world as against right hand in Pakistan, the ownership restriction has been dropped to facilitate import of right hand drive cars from whatever sources these are available.
In left hand drive Duabi, exporters resorted to forged documents to get around the right hand drive only rules. Also, as many of the cars are leased for three years after which they are sold, it has been decided to extend the limit to three years.
The reasons for the relaxations of the rules are clear. At present there is about a 30-40,000 gap in the supply of new cars in Pakistan which leads to inflated prices and a long time to wait for delivery. These changes would ease the burden on consumers.
Used car dealers anticipate arrivals of 30,000-35,000 used cars in the current fiscal year.
The government, prior to the new measures taken in the Trade Policy 2005-06, increased the depreciation allowance on used car imports to two from one per cent in the budget 2005-06. This was designed to bridge the demand and supply gap of about 40,000 cars, which the local industry has failed to meet despite doubling production capacities.