LAHORE: Lauding the government's transfer tax initiative to counter the issue of "on money", CEO Indus Motor Company (IMC) Ali Asghar Jamali said this move will be beneficial for industry, consumers and government as well.
Talking to media personnel after a local part manufacturing plant visit, Jamali said that original equipment manufacturers (OEMs) have helped the local industry with transfer of technology while developing the local engineering base.
IMC alone has done above 45 technical assistance agreements with local vendors, he added. With expansion of the vendor base, the OEMs have also invested heavily to increase their capacity; however, surge
in demand creates room for investors to earn on-money on new models, he said.
Jamali maintained that the government has promulgated an ordinance and limit 2nd sale of vehicles within 90 days of invoice and one who does this will be charged a fine based on Engine CC.
"The apparent reason to introduce this amendment is to discourage own money/premium practice in the market.
The step is very encouraging not only to existing players but new entrants also.
This policy should be applied to imported vehicles as well." said Jamali, adding: "Industry wide production capacity has now doubled from 275K units to 500K units while production variety is also increasing."
"The premium is an ogre issue being faced by the local auto industry that promotes flow of black money within the economy and capsizes taxable income to non-taxable," Jamali added.
"We have also proposed withholding tax up to Rs 200,000 which should work as deterrence for customers who purchase vehicles at premium from non-authorized Dealers which the government has adopted and SRO is expected soon," said Jamali.
Commenting on the Electric Vehicle (EV) Policy, he said: "Incentives for hybrid cars should also be included in the policy, as it is the first step towards electrification of vehicles and globally hybrids are part of EVs."
Copyright Business Recorder, 2021