One industry suffering thanks to COVID-19 in Pakistan is that the Automobile Sector, which wants the govt to slash taxes within the Finance Bill 2020.
Due to the spread of COVID-19, many industries are struggling to realize their goals and operate their day-to-day businesses like before. One such industry in Pakistan is that the Automobile Sector, which wants the govt to slash taxes within the Finance Bill 2020.
Pakistan Association of Automotive Parts and Accessories Manufacturers’ (PAAPAM) former chairman Mashood Ali Khan stated, “The decline within the country’s automobile sector began in July last year when the govt announced that non-filers of income tax return can register just one vehicle against their CNIC.
“After that, we were burdened with additional customs of 7-11% and federal excise duty of up to 7.5%.”
In 2019, the Pakistani rupee was very volatile; in September and October, the rupee depreciated greatly against the dollar, which didn’t impact the car industry positively. Former Chairman Khan indicated that the world had hoped that 2020 would be the year of revival – watching the info from January and February 2020, it seemed possible albeit the numbers were lower from those in January and February of 2019.
“Then, we pinned our hopes on new vehicle models but the coronavirus outbreak resulted in zero car sales in April 2020,” Mashood Ali Khan said.
In the past few years, the assembly has fallen rather than rising. a couple of years ago, Pakistani manufacturers made around 250,000 cars during a year and aimed to hit the five hundred ,000 mark.
However, the info of this financial year and former financial year show that we haven’t even crossed the 200,000 mark. within the current financial year , 89,284 cars are manufactured thus far . The previous year’s data shows that 196,415 cars had been produced then.
It seems that the 18% nuisance tax that has been imposed on the cars isn’t motivating people to shop for cars. consistent with Khan, “if the govt cuts it [sales tax] right down to single digit, it’ll provides a boost to the whole automobile sector and enhance government earnings also .”
Currently, the car sector is contributing around 2.8% of the gross domestic product (GDP). the world reportedly adds Rs 30 billion to the national exchequer within the sort of taxes and duties, because it is taken into account the 3rd largest taxpayer within the country (after oil and gas industry and telecommunication sector).
Mashood Ali Khan added,“Executives from other industries like textile and food wont to buy cars, however, they need discontinued purchases since all sectors are hit by COVID-19 and there’s virtually no demand.
“The industry of the many countries is suffering, including India, but their government is giving incentives while our government isn’t .”