The month of June is almost here and the Govt will announce a new fiscal year financial budget. The Budget is basically a calculation for the next year’s expenses and the Govt shares many new ideas. The Ideas are mainly on increasing the revenue and reducing expenses. Govt also regulates the prices of many items including automobiles. Will motorcycle prices reduce in the new budget? Here is what we know so far!
So far If the price of a product increases in Pakistan, the chances of its reduction are slim. Unless and until the Govt intervenes and makes a new policy.Though there is no such governing body of the Govt which regulates the increasing automobile prices. Currently, the GST on automobiles in Pakistan is 18%. Before the new Govt, it was 17% and it was increased to increase tax revenue.
The motorcycle manufacturers are dependent upon foreign imports to assemble their products in Pakistan. None of the manufacturers in Pakistan are 100 percent self sufficient and they need to import smalll bits from China or around the world. This makes the local industry volatile and a small change in foreign currency or import laws can set off many things.Recently Suzuki Motorcycle plant is undergoing closure due to these issues. Read More here
If the Govt is really serious to control motorcycle prices, they have to do following things.
First of all, the price changes should be closely regulated, moneterd and evaluated before being implemented. A Govt office can help in this regard by taking all manufacturers on board.
Secondly, the localization of imported parts should be started immediately. This will help in increasing the volume as local products are cheap to make and maintain.
Thirdly, the Sales tax on motorcycles can be revised to 10% and this will create a relief for many motorcycle maufacturers and end consumers.
As of now any relief campaign is not expected from Govt in upcoming budget but let’s hope for the best!