Regulatory Duties Up to 100% on Cars & Tyres Import Proposed

In a bid to control the economic instability and uncertainty, the government is mulling imposing high Regulatory Duties (RD) and Additional Customs Duty (ACD) on a number of items, including cars and tyres. According to media reports, the current government is preparing a revised plan to reduce imports by nearly $1 billion by increasing RD up to 100%. 

Furthermore, the suggestions were presented during a meeting chaired by Finance Minister Miftah Ismail to review the options presented by Federal Board of Revenue (FBR) and the Ministry of Commerce. 

Regulatory Duties on Cars &Tyres 

As per media reports, the authorities have proposed that government could increase the RD on imports of tyres to 50%. The current RD on tyres is 20%. 

Meanwhile, the authorities proposed to increase RD on cars above 1,800cc to 100% from the current 70%. However, some sources are claiming that this RD is proposed on cars above 1,000cc cars. So, it means nothing is clear as yet and we will bring update for you, once there is one. 

Also, 35% ACD has been proposed on the prevailing rates. The important  thing to remember is that these are only proposals currently. However, under the current economic situation, the government is likely to accept these suggestions in the new fiscal budget. 

So, fingers crossed, and the wait is on. 

Who Will be Beneficial? 

If this government accepts these suggestions, then Toyota, Honda, Suzuki, Kia, and other companies, assembling cars locally will be beneficial. Meanwhile, the companies like MG and Haval, which sell imported units, will face more difficulties competing in the local market. 

It seems more challenging times for the local auto industry are ahead, and we can expect more price hikes, especially for CBU units. Since the start of 2022, we have seen repeated price jumps, making the situation for consumers worse. With political uncertainty and continuous rupee devaluation, companies like Toyota Pakistan have stopped their bookings, which shows the seriousness of circumstances for the auto industry. 

We hope that the situation will get better in the near future and we see some stability in the market.  

Do you think the government should increase regulatory duty on cars? Share your thoughts in the comments section.