Recently, the Federal Board of Revenue (FBR) has started an investigation into a new car company, reportedly Morris Garage (MG) Pakistan.
According to the latest media reports, FBR is launching an investigation into “mega billing fraud”. The reports further said that the related authorities and government ministers were also presented with “evidence” that there was insufficient accountability for a proper investigation.
Moreover, state fraud causes billions in economic losses. As per facts, MG HS declares the value of customs duty is $ 11,632 per ton Unit. This is the price that MG is not even selling in China or other major established markets.
MG sells the same vehicle worldwide for $ 27,000. We can say that SAIC could sell these units to JW-SEZ at such a low price. This looks very attractive, but at the same time raises questions because it appears to be “underestimated”.
Does it trade-based money laundering?
This could also be the reason why the company placed the black mark on the product statement and made the stated value discreet. When under-billing occurs, it seems like a typical case of trade-based money laundering.
MG began importing vehicles into the country in September 2020, importing more than 400 vehicles. People began to question this. Meanwhile, JW-SEZ, MG / SAIC’s local partner in Pakistan, announced that they pay 123.77% duties (instead of 50% subsidy) for every unit they import.
The 123.77% excise duty is the correct tax for a vehicle under the FBR customs rate when paid in full. So since you pay the full import duty you can import as many units as you want which is no doubt correct and will not cause any problems.
But recently, the Pakistan Automotive Manufacturers Association (PAMA) states their concern that the federal government is favoring a particular car manufacturer calling it to be a new player.
You raised these concerns at the 34th meeting of the Auto Industry Development Committee (AIDC). The main purpose of the auto policy was to invest in the country and increase competition in the country. Moreover, to help consumers create many local jobs, and encourage the growth of related industries. JW-SEZ applied for greenfield status a month ago.
However, the automatic policy is less than five months before it expires. According to the guidelines, a vehicle must be assembled in Pakistan before its expiration date. There are reports that nothing is actively being done while the factory is being set up, and it appears that JW-SEZ plans to continue importing CBUs as they currently do.
Javed Afridi’s Response
Commenting on these media reports, Javed Afridi, head of MG Pakistan tweeted,
“As newcomers are introducing exciting new models at much lower prices instead of competition, we expect malicious campaigns and unfounded rumors.”
آئیں ایمانداری اور مقابلے کے جذبے سے لیس ہوکر ھم اس مارکیٹ کو کوالٹی کا نشان، عوام کی بہتر خدمت کے لئے مثال اور آسان قیمتوں پر بہترین گاڑیوں کی فراہمی کے لئے ایک جانا پہچانا نام بنا دیں.
— Javed Afridi (@JAfridi10) February 14, 2021
He said MG knows that competition is an unknown phenomenon in the Pakistani auto industry. We invite everyone to participate in a fair competition. In order to provide Pakistani consumers with a wider and better range of vehicles at lower prices, he said.
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