RECORDER REPORT

KARACHI: Chairman of the All Pakistan Motorcycle Spare Parts Importers and Dealers Association, Khalid Waheed has urged the Federal Board of Revenue (FBR) to lower the custom duty and withdraw the addition custom duty on the commercial import of motorcycle’s spare parts.

He said on commercial import of motorcycle spare parts there is 35 percent custom duty, 11 percent addition custom duty, 17 percent sales tax, 5.5 percent income tax and finally GST, the total sum of taxes becomes 93 percent at the import stage which makes the spare parts a super luxury item to buy for poor motorcyclists.

The trade is on the brink of collapse due to higher rate of duty & taxes at the import stage that is raising the share of smuggled spare parts throughout the country.

In the absence of proper transportation system in the country especially in Karachi where 50 percent commuting is by motorcycles, especially the poor segment use it mostly to go to their jobs everyday. The are 15 million registered motorcycle meaning that 15 million poor people are paying 93 percent tax on the maintenance of their motorcycle after buying the motorcycles on monthly instalment, such a huge taxes is unimaginable not even the luxury items can match with it.

The demand of aftermarket motorcycle parts could not be met by local SMEs due to low production. Auto vendor industry supply to only assembler as 2.5 million motorcycles are being assembled annually and the gap in the market is fulfilled by 60 percent smuggled parts due to lower prices as compare with imported parts.

Chairman Khalid Waheed requested the FBR to lower the custom duty and abolish the additional duty on the import of commercial importer of motorcycle’s spare parts and relief should be given to the poor class.

Higher custom duties are not creating balance between industry and consumer welfare. Tariff should be rationalised which should support the buying power of the poor masses. Lowering the custom duties can eliminate the smuggling and increase custom revenue. More importers can be registered with sales tax and income tax and documented economy will flourish.