ISLAMABAD: The anti-trust watchdog has asked the government of Pakistan to immediately withdraw the tax amnesty scheme for smuggled vehicles, terming the policy a violation of competition laws besides becoming a source of expansion of grey market in the country.
In a policy note to the federal government, the Competition Commission of Pakistan (CCP) highlighted flaws in the recently announced policy of legalising smuggled vehicles by paying comparatively less taxes. It said the scheme has placed both the importers of used vehicles and assemblers of new cars at a disadvantage.
“This may result in a creation of grey market for automobiles in the country on a sustained basis.”
The existence of grey market will act as a parallel market of vehicles and create unfair competition for the formal sector, the CCP added.
“People who have violated the law by not paying taxes and duties have been incentivised to import motor vehicles of their choice without imposition of any allowable age restriction on them,” it said.
Many have viewed the Federal Board of Revenue’s move as a political decision aimed at facilitating influential people to make money by legalising the vehicles brought illegally into the country.
“It is recommended that the policy may be reconsidered and withdrawn or suitably amended to eliminate discriminatory treatment resulting from the Statutory Regulatory Order (issued to give effect to the scheme),” said the CCP.
The All Pakistan Motor Dealers Association has already raised voice against the scheme.
The facility is limited to only smuggled vehicles and is not applicable to the import of vehicles via a customs station in violation of the Import Policy Order and the vehicles which have been auctioned.
The age limit for import of a car is three years, but there is no age limit for smuggled vehicles, which is anti-competitive, said the CCP.
Internews
