As the coronavirus pandemic wreaks havoc on the economy and hits car sales, the country's auto sector has sought immediate government attention including a stimulus stimulus package to deal with the impact of the pandemic and lockdown.
Talking to this scribe,
'There is very little to complain to anyone during the outbreak however what does concern us is how the government would set its priorities to recover from the fallout and generate demand after the post-crona situation,' Abdullah added.
He maintained that the auto industry would require special attention of the federal government to restore to its normal. The car manufacturer said that the value chain is extremely labour intensive and the industry has urged the government to break the status quo which has already hit the demand and created an industry wide liquidity crunch. He shared that the industry outlook kept on getting weaker even before the lockdown occurred
The CFO also demanded the waiver on minimum turnover tax for greenfield projects, the removal of Federal Excise Duty (FED) on sales and reduction of sales tax on imports. He also stressed the government for special rate incentives from
Meanwhile, Head of Public Relations and official spokesperson of
Shaikh added that the current year started with a squad of new taxes like imposition of federal excise duty (FED), Advance Customs Duty (ACD), minimum value addition tax, while the exchange rate also kept escalating during the year. As such, there was industrial fall month in, month out that 9MFY20 ended with a decline in each sector of the auto-industry. The spokesperson said that the Covid-19 outbreak has made the things from bad to worse.
'Since
He opined that the financial crunch is crippling the business, as there is no sales activity taking place due to lock down since mid
He noted that the dealerships and auto parts vendors are suffering the most, as it is very difficult for them to make these huge payments without any sales receipt, hence, some of the small dealers and vendors are now on the verge of bankruptcy.
The spokesperson shared that there has been fall all over the local auto industry during the current financial year.He said that demand for Pak Suzuki passenger cars andLight Commercial Vehicles (LCVs) plunged by 38.5percent and 59 percent respectively in 9MFY20 as compared to last year.
Shaikh said that in
The PSMCL spokesperson feared that as the impact of Covid-19 pandemic crisis is likely to continue in coming months, there is no respite from these woes; there would be inevitable question of proportionate cost push of products in wake of such massive fall in production due to idle capacities, besides, the cost build up due to unsold inventories and high exchange rates. He demanded that it is time that the government may look into problems of this very important industry and provide support and remove irritants through a stimulus package.
Shaikh said that Pak Suzuki has already been on a downward trajectory since the beginning of the current fiscal year due to economic factors, changes in policy for the auto sector and imposition of additional taxes, duties and ever increasing cost of production due to depreciation of the Pakistani rupee. He added that the outbreak of COVID-19 has now led to complete shutdown of plants and offices. He added that Pak Suzuki believes that the revival of the auto sector through tax incentives and other relief measures is the need of the hour as the auto sector is the major contributor to
'We request the government to take measures for the survival of the auto industry,' he said. Shaikh requested the government that on Cars Complete Knocked Down Units (CKD), import duties should be 10 percent from current date to
He further requested the government that general sales tax (GST) should be reduced by 50pc from current date to
He also stressed that the government should immediately grant blocked refunds of sales tax and income tax and reduce income tax for salaried class by 25pc for TY 2019 to benefit them under these crisis situations. He added that as a major portion withholding tax on salaries is already paid, therefore, the balance for last quarter should be exempted and corporate tax should be reduced to 28pc.
© Pakistan Press International, source