Rumors and speculations about the removal of 10% Federal Excise Duty (FED) on cars above 1700cc has been circling around for quite some time now. But there is no truth in such conjectures. Neither there is any notification of this kind by the government nor any announcement by the FBR in this matter. 10% FED stays.
The FED has hampered the growth of auto industry. It has resulted in the price hike. Cars with engine capacity above 1700cc are paying 10% extra. Manufacturers have no other choice but to revise the prices. There is a recent 11.5 percent increase in the price tag for automobiles above 1.7 Liter. Dollar rate is also affecting all major industries including the automobile.
The practice of charging illegal premium for the immediate delivery of new cars is also a serious concern. Manufactures have come together to tackle the issue. They have decided to black list dealers who are involved in this crime. It is also speculated that the government is establishing an authority to keep watch on dealers charging illegal premium.
The industries of Pakistan are struggling since the energy crisis grew into an invincible monster. A large number of industrial establishments have been shut down and majority of them that includes a big chunk of textile has shifted to Bangladesh and other Southeast Asian countries. This is indeed a sad state of affairs. Automobile industry is the most important part of Pakistan’s economy. The government should facilitate this sector and should not impose heavy taxation. The buying power of Pakistani people is decreasing with every passing day.