Amnesty for owners of smuggled vehicles

ISLAMABAD, March 5: With 10 days to go before the end of its term, the government has approved an amnesty scheme to allow owners of non-customs paid vehicles to legalise their smuggled cars by March 31 after payment on nominal duty and taxes.

The scheme will benefit owners of about 100,000 smuggled vehicles mostly used by influential people. But the Customs intelligence has put the number of non-duty paid smuggled vehicles at 2.3 million. 

As per the scheme announced through a Customs statutory regulatory order (SRO), the Federal Board of Revenue has allowed 60-70 per cent depreciation in value of used cars for assessment of duty. This facility will be allowed in case of five-year-old used cars. In case of more than five-year-old cars, five per cent real depreciation in value per year for assessment of duty will be allowed. More than 14-year-old cars will be subject to a flat rate of Rs50,000 to Rs100,000 depending on their make-up. 

Only one per cent redemption fine will be imposed on used cars. At present the government allows import of only three-year-old used cars. However, the amnesty for smuggled vehicles has no age limit and can be used for legalisation of any car smuggled into the country through non-notified routes. Customs officials estimate the amnesty scheme will yield Rs8 to 10 billion for the government exchequer. This will be the second amnesty scheme announced by the PPP-led coalition government. 

Last year, the government gave amnesty to those who want to whiten their black money by making investment in the stock market. Another tax amnesty bill has been under discussion for the past few months and will likely be presented in the National Assembly for legislation soon. Customs officials believe that provinces will raise an amount ranging between Rs1 to 1.5 billion after the registration of all smuggled cars. 

They say it is not possible for the Customs department with its limited manpower to launch crackdown against smuggled vehicles. They are of the opinion that the amnesty scheme will at least yield additional revenue for the exchequer. Otherwise owners of such cars neither pay excise duty nor duty and taxes at the import stage. The amnesty scheme for smuggled vehicles may not go well with local automobile manufacturers who accuse the government of encouraging unlawful activities.