LAHORE - The Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) will hold its annual dinner at PC Hotel, Lahore on Thursday, 12th February 2015, where Federal Minister for National Food Security & Research Sikandar Hayat Khan Bosan will be the chief guest.
The function is being held to bid farewell to the outgoing Chairman Usman Malik and welcome the newly-elected chairman Siddique Misri, senior vice chairman Mumshad Ali, vice chairman Iftikhar Ahmed and new Managing Committee. The new SVC Mumshad Ali stated that on this occasion, former chairmen and managing committee members will also grace the occasion, and the annual dinner will largely be attended by auto parts manufacturers from Lahore as well as Karachi.
Mumshad said that Association will discuss various issues with the federal minister including government negligence regarding unbridled import of used cars and agriculture farm machinery related issues to enhance production.
Mumshad said that although the tractor industry has seen sales drop significantly, jobs cut and profits plunge over the last few years because of the enforcement of sales tax, but the present government’s decision to reduce it from 17pc to 10pc from July 1 has gone a long way in boosting sales.
The reduction in the sales tax has saved farmers Rs30,000 on a small tractor and Rs90,000 on the large one. The government is also benefiting from the cut in sales tax rate as it is generating more revenues due to growth in sales. The industry expects the government will keep the tax regime stable for the tractor industry to enable us plan for the future. Uncertainty and confusion always hurt the industry as we have seen in the last few years, he noted. He was also critical of the previous government’s policy permitting zero-rated import of the built-up tractors. It was a bad policy for the local vending industry that the present government has reversed.
In federal budget FY15, the government announced reduction in General Sales Tax (GST) and increased agri-credit loan target from Rs380 billion to Rs500b. Both these measures will provide the much needed growth, he added.
He said that countries including India, Thailand, Malaysia and even Japan protect their local industry as they have imposed heavy taxes and penalties to discourage import.
Mumshad was of the view that the vendors of tractors and locally assembled cars and light commercial vehicles look more perturbed over long delay of auto policy. The industry stakeholders will raise such issues with Federal Minister for National Food Security & Research Sikandar Hayat Khan Bosan on Feb 12. The turnover of auto component sector has grown from a figure of $1.5 billion to $9.8 billion, he added. “We will plead our case before minister to save auto industry, which is fully documented, pays full taxes, besides providing employment to 200,000 persons directly and 1.6 million workers indirectly,” he said.