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Call for Affordability: Pakistan Pressures Car Dealers to Lower Prices in Response to Duty Changes

The government of Pakistan has issued a firm directive to car dealers, emphasizing the need to lower the prices of imported vehicles in response to the recent removal of regulatory duty. Failure to comply with the reduction in prices may result in severe consequences for dealers. The move comes after the expiration of additional regulatory duty on luxury goods, including imported vehicles, on March 31.

Minister’s Call for Price Adjustments: Speaking in Islamabad on Saturday, Minister Syed Naveed Qamar reiterated that the additional regulatory duty on luxury goods had come to an end as of March 31. Minister Qamar called upon car dealers to adjust their pricing accordingly and reduce the prices of imported vehicles. The purpose of removing the regulatory duty was to alleviate the financial burden on consumers and enhance affordability. Car dealers who fail to lower prices risk facing strict actions from the authorities.

Focus on IMF Agreement and Letter of Credit Restrictions:

Minister Qamar also highlighted ongoing efforts to finalize a staff-level agreement with the International Monetary Fund (IMF) before the upcoming budget. Once the agreement is in place, restrictions on the opening of letters of credit (LCs) will be lifted. This development is expected to facilitate the availability of raw materials for export-oriented industries. The reopening of LCs will enable these industries to operate smoothly, contributing to the overall economic growth of the country.

Expiration of Regulatory Duty Notifications:

It is important to note that the time-bound notifications regarding the imposition of regulatory duties and additional customs duties (ACDs) on over 600 luxury and non-essential items expired on March 31. This expiration provides businesses, including car dealers, with an opportunity to adjust their pricing strategies and provide relief to consumers.

The stern warning issued by Federal Minister for Commerce, Syed Naveed Qamar, underscores the need for car dealers in Pakistan to reduce the prices of imported vehicles following the removal of regulatory duty. With the expiration of time-bound notifications on regulatory duties, dealers have an opportunity to pass on the benefits of reduced costs to consumers. It is crucial for car dealers to heed this call, as non-compliance may result in severe consequences. As the government continues its efforts to finalize an agreement with the IMF and lift restrictions on LCs, a more favorable business environment is anticipated, benefiting various industries, including the automotive sector.

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