A few days ago, Finance Minister Miftah Ismail gave a statement regarding imported goods. He said something to the tune of that the government will make these goods so expensive that it would be next to impossible to buy them.
Now, it seems, he wasn’t exaggerating.
The government by amending the SRO 966(I)/2022 dated June 30, 2022, has massively jacked up the regulatory duty on a variety of imported goods, including cars. This will without a doubt exponentially raise their prices.
Let’s take a look at the old and new regulatory duties on new and used imported cars.
Simply put, if you were paying a RD of 15% on an imported car, now you will be paying 100% RD on the same, which makes a percentage increase of 566%.
In addition, Customs Duty has also been jacked up.
Imported Cars in Pakistan
Here are some of them.
|Prius S||CR-V||APV||Carnival Executive||Santa Fe||HS PHEV|
|Rush G AT/MT||IONIQ||ZS|
|Corolla Cross||ZS EV|
Why Does The Government Want to Increase the Prices of CBUs?
Increasing RD on CBUs seems like an afterthought on the government’s part. It never wanted to allow their import in the first place and therefore a ban was imposed on the import of CBUs. Later, as the loan approval talks progressed with the IMF, the government came under pressure from the Fund to lift this ban. Pakistan after all is a signatory to the WTO and cannot impose a blanket ban on the import of goods.
Now that the government has lifted the ban under pressure, it still wants to discourage the import of CBUs, reason being it is short of US Dollars and wants to stop the Dollar flight. So, what does it do? It makes their import super expensive.
Look at the increase in RD for EVs. The 90% increase in duty will obviously make them much more expensive now and slow down the pace of “electrification of Pakistan”. Though it would be unfair to suggest that the previous duty was helping much. The mere import of Audi e-tron and such luxury vehicles was never going to usher in a new, EV era in Pakistan but an increase of 90% will surely bring down curtains on the hopes of seeing EVs in abundance in Pakistan.
Interestingly, the RD on the import of new SUVs 4✕4 like Toyota Land Cruiser is increased by only 10%. While, the RD on the import of new minivans like Suzuki Every has been increased by a whopping 85%.
Let us know what you think about the recent RD hike in the comment section below.
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