Wednesday , March 3 2021
Breaking News
Home / Karachi / Tyre importers, dealers propose reduction in duty
Tyre importers, dealers propose reduction in duty

Tyre importers, dealers propose reduction in duty

KARACHI: Pakistan tyres importers and dealers association (PTIDA), in its proposals for the upcoming budget presented to Federal Finance Minister Ishaq Dar, has suggested the reduction of customs duty on import of tyres.

In its suggestions PTIDA has asked for bringing down the existing duty rates of passenger car tyres from 25 per cent to 5 per cent; from 20 per cent to 5 per cent on import of light truck tyres; from 5 per cent to zero rated on import of truck and bus tyres.

The proposals read that tyres are prone to smuggling due to high rate of import duties and sales tax. Furthermore, there exists a substantial gap between local production and national demand. That is why they are preferable items for smugglers, which is hurting the legal importers and local industry.

The proposals read that there are 250 different sizes and patterns of consumable tyres. 80 per cent of these are radial. The local production lingers around 50 different sizes, half of which are non-radial. The indiginous yearly production is 1.21 million tyres out of an annual demand of 9.75 million tyres. While legal imports are 2.7 million tyres.

Import of raw materials for tyres is duty free as well as exempted of withholding tax. PTIDA proposals read that reduction in duty structure will not affect the sales and profitability of the local manufacturers because of their captive customer base. Moreover it would add to the documentaion of parallel economy and the government shall be able to earn Rs 2.5 billion in addition to its current collection from the import of tyres under the head of customs duty.