Car import policy and economic growth of Pakistan.


Pakistan is among the group of 40 countries in the world that produce automobiles. Its booming population of 180 million and 9th largest labor force has a huge potential to grow and achieve economic prosperity with right and focused policies for its economy. Auto industry is referred to as 'industry of industries' in the developed world. The auto industry of many regional countries has played a pivotal role in transforming those countries into economic tigers. It is common to face difficulties when you are in the market to buy an imported car in Pakistan. Japanese used vehicle exporting is a grey market international trade involving the export of used cars and other vehicles from Japan to other markets around the world since the 1980s.

Despite the high cost of transport, the sale of used cars and other vehicles to other countries is still profitable due to the relatively low cost and good condition of the vehicles being purchased. Nearly 1.4 million used vehicles were exported from Japan in 2006.The most popular destinations for used cars from Japan are Mozambique, Sri Lanka and Pakistan. It is observed that auto sector is among the top 5 contributors to Pakistan's tax revenues and has skilled work force of 3 million. Different global vehicle brands are operating in the Pakistani Market and all 5 sub: sectors of auto industry are being locally produced that include passenger cars, light commercial vehicles, tractors, buses, motorcycles and trucks even their OEM parts. The production data analysis of all the subsectors revealed that the growth of production has remained negative over the period of 2006: 07 to 2013: 14. At the same time the imports of Pakistan in auto industry have increased, Pakistan applies strict controls on imports. Imported cars must be not more than three years old. High import taxes are levied on imported vehicles. Special ships are sometimes used for exporting vehicles to Pakistan to meet the rising demand. Customs duties are levied on ad: valorem basis. Pakistan's overall average applied tariff in 2018 was 10.09 percent. In the 2018 budget, the government reduced the maximum general tariff rate from 25 percent to 20 percent (except for vehicles) and simplified the tariff structure by reducing the number of duty brackets from six to four. Other than customs duty, the government charges 17.0 percent sales tax on the duty paid value of a variety of goods produced in or imported into the country.

International trade...

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