With reference to an article published in Business Recorder on 19th of November, we would like to place before the readers of this esteemed newspaper the following facts:
The price hike of imported tyres in no way is related to anti-smuggling drive carried out by the government. The price hike is due to the following factors:
— Increase in exchange rate from 152.5 to 175 (approximately 15%).
— Increase in regulatory duty of 10% in the federal budget 2021-2022, making it a total of 25% on truck and bus tyres, and 20% on car and light truck tyres.
— Increase in Customs Valuation on August 3, 2021.
Hence, the total increase in cost of imported tyres is around 30 percent since July 1, 2021.
It is worth mentioning that only 20% of the market demand is met through local manufacturers, 30% by importers and a staggering 50% by smuggling. It is important to note that tyres are not luxury item. We therefore urge the government to abolish regulatory duty on the tyre sector. This action will certainly help curb smuggling and protect legal import business as well as local industry and provide relief to consumers.
Muhammad Rashid Raza Manager Marketing & Service Pakistan Rubber & Tyre Company (Distributors of Bridgestone Tyres)
Copyright Business Recorder, 2021