Additional transfer tax proposed to counter own money

Salim Ahmed


Chairman Pakistan Automobile Assemblers Dealer Association (PAMADA) Iqbal Shah Saturday suggested additional registration tax in case of transfer of new car within three months of purchase to help curb the menace of premiums.
“Early delivery demands by customers encourage investors to exploit customers by offering vehicles on premium payments and if customers book their vehicles and secure delivery as per the schedule offered by companies, no premium will exist,” he reasoned.
He clarified that vehicles are not commodity items, which can be made and shelved. “They are manufactured against individual orders of the customers and the industry has taken various steps towards discouraging premiums such as refusing multiple bookings of vehicles on a single CNIC, displaying vehicle availability information at the dealership floors and on the company website. We request the customers to book their vehicles only at the authorized dealerships and wait for the delivery of their vehicles as per the delivery date”. He added that with customers’ support, the menace of premiums on car prices can be eliminated.
He said that OEMs discourage premiums and have run consumer education campaigns various times through advertisements and have made available the vehicle availability information on their website, however demand of immediate delivery from customers against actual delivery time continues to encourage investors to charge own money. He also mentioned that due to government’s efforts to improve the economy and the stimulus in the market from the China Pakistan Economic Corridor (CPEC), domestically manufactured vehicles are in high demand. “Lead times on vehicle delivery arise whenever there is high demand and are a common phenomenon across the globe”, he said, referring to the almost 6 month waiting period on certain Suzuki variants in India.
Speaking on capacity enhancement by various OEMs, Iqbal added that “Presently all Automakers are operating at full capacity and resorting to production overtimes to meet demand besides working on increasing their capacity. The Auto Industry Policy 2016-2021 is attracting new entrants from all across the globe. Their entry in Pakistan will result in more choices for the consumers and encourage healthy competition among the various OEMS. We are at a tipping point today, as we were back in 2007, when the industry was investing in capacity expansion, however sudden relaxation of used cars import policy adversely affected the market, resulting in closure of 3 plants. Therefore in order to sustain the interest of global players in the Pakistan Auto Market, stability and consistency of policies is needed”.

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