LAHORE - Despite the government’s budgetary measure to bring down the rates of used hybrid vehicles by reducing the taxes on hybrid vehicles, dealers have not brought down the prices of hybrid vehicles.

Even after such a huge relief, ranging from 50 per cent exemption of all duties & taxes on hybrid cars up to 1800cc and 25 per cent exemption on up to 2,500cc, the price of 1300cc 3-year old Honda Insight, which was available in January 2013 at around Rs1,500,000, is now being sold at Rs1,900,000, an increase of 27 per cent. Similarly, price of three-year old 1800cc Toyota Prius was increased by 26 per cent from Rs1,900,000 in January 2013 to Rs2,500,000 in September 2014.

Auto sector sources said that that the prices of non-hybrid vehicles were also increased significantly. Used 3-year old Toyota Vitz was available at Rs1,200,000 in January 2013 but it is now being sold at Rs 1,500,000, an increase of 25%. Prices of 3-year old Daihatsu Mira were increased from Rs 800,000 in January 2013 to Rs 1,050,000 in September 2014, an increase of 31%.

Statistics show that the business of used cars import is continuing to thrive, as 9,569 units of used vehicles were imported in first three months of FY 2014-15 as compared to 5,863 units in the same period last year, showing a huge growth of 63%. Though the import of used cars is allowed only to Pakistanis living abroad under Transfer of Residence, Personal Baggage and Gift Scheme under import policy order, this policy is being massively abused by used cars traders’ mafia with the support of some customs appraisement officers, auto manufacturers alleged.

They suggested the FBR to conduct strict audit of dealers who purport to be the members of this unregistered association, as these dealers are making huge profits ranging from Rs 200,000 to Rs 400,000 on the sales of each car. Their transactions are not transparent and without any contribution to the exchequer, as no taxes are paid on the profits made by the used car dealers, PAAPAM chairman, Siddique Misri, observed. He added that these imports are also damaging the Pakistani economy as they result in drain of valuable foreign exchange.

Paapam senior vice chairman, Mumshad Ali criticized the illegal demand of commercial import of used cars, saying that this demand is led by the so-called All Pakistan Motors Dealers Association, which is not even listed on Directorate General of Trade Organization website, as it is not a registered trade association under the law. Also worth noting is that the APMDA chairman is not elected every year, as per law, and the current chairman has been holding this office continuously for the last many years.

Auto parts manufacturers said that FBR should seriously start a campaign of auditing the used car dealers for increasing their collection of evaded taxes.