A member of Pakistan’s National Tariff Policy Board has criticized the government’s decision to impose additional customs duties of up to 31 percent on imported vehicle tyres and motorcycle parts, saying the move conflicts with its policy of reducing trade barriers.
According to a Tribune report, Dr. Rubina Athar, who helped formulate the National Tariff Policy, said the proposal to impose additional duties should have been presented to the board before being sent to the Economic Coordination Committee (ECC). She made the remarks during a panel discussion on tariff reforms organized by the UK-funded Revenue Mobilisation, Investment and Trade Initiative.
The Finance Ministry said the ECC had approved an additional customs duty of 11 percent on imported vehicle tyres and motorcycle parts. The duty rises to 31 percent on certain motorcycle components when manufacturers import them instead of producing them locally.
The affected motorcycle components include license plates, brackets, side reflectors, decorative parts, foot plates, wheel assemblies, windshields, seats, toolboxes, and center covers. However, imports of these parts from China remain subject to zero duty under the Free Trade Agreement between the two countries.
The Federal Board of Revenue said the proposal originated with the Ministry of Industries and Production’s Engineering Development Board. The Ministry of Commerce said the ECC had approved amendments to SRO 693(1)/2006, which covers additional customs duties on certain locally manufactured parts imported by original equipment manufacturers in kit form.
The Commerce Ministry said the relevant automotive sector notifications remained in effect even though the Auto Policy 2021 to 2026 expired in June. It added that the National Tariff Policy Board had previously determined that SRO 693 fell outside its remit because it was part of a separate policy framework.
Athar argued that import substitution policies had made industries inefficient without delivering benefits to consumers. Senior economist Vaqar Ahmed warned that favoring selected sectors in the application of tariff policy could undermine its objectives. However, Nimir Chemicals CEO Zafar Mehmood said reducing customs duties alone would not necessarily lower costs, as other taxes and duties also burden businesses.
FBR Member Customs Shakil Shah said advance income tax collected at the import stage tied up businesses’ funds regardless of whether they ultimately made a profit. He called for the elimination of such withholding taxes at the import stage, arguing that importers could struggle to recover amounts withheld beyond their actual tax liability.
Rubatech CEO Zain ul Abideen said the National Tariff Policy, combined with the new energy vehicle policy, threatened the conventional automotive industry by favoring new energy vehicles. Athar, however, argued that industries needed pressure to overcome inefficiencies. Wajid Bukhari, secretary general of the Pakistan Association of Large Steel Producers, said the tariff policy had not significantly affected the steel industry so far, citing lower interest rates and energy costs.
The post Up to 31% Duty on Imported Bike Parts Sparks Tariff Policy Row appeared first on ProPakistani.
