KARACHI: The government is expected to lose around Rs. 327 billion or $1.5 billion in revenue during the ongoing financial year (2022-23), following the restrictions on CKD imports that shrunk the production volume up to 50 percent.

Talking to the media, Ali Asghar Jamali, CEO, Indus Motor Company (IMC) denied laying off any employee due to a significant dip (50%) in production volume, saying that “IMC has not laid off any employee while production halts due to restrictions on CKD imports, decline in demand and flood impact that led to the volumes drop up to 50%.”

Furthermore, he said that the drop in sales and production by 50 percent would not only hit the industry hard but it would also deprive the government of its expected Rs. 327 billion or $1.5bn revenue as 39% of vehicle price is nothing but taxes.

Underscoring the need for strict measures to revive the economy and supporting the recent measures taken by the government, he said that restrictions on CKD import would not help counter the current account deficit due to the mere 3% contribution of the auto sector in the import bill.

On the other hand, the import restrictions are causing to affect the local vendor industry of Pakistan and over 3 million direct and indirect employment associated with the auto sector, he maintained.

“With highest ever, sales last year, the auto sector’s share in import bill was only $2.25 as against the food and petroleum imports, which stood at $27bn,” he said and termed it as the biggest contributor to the current account deficit.

“All imports are not of the same nature, authorities need to categorize the imports and while restricting imports of luxury goods, the imports for local production should be allowed,” he added.

Copyright Business Recorder, 2022