PAKISTAN: General Tyre unhappy with FPCCI budget proposal

According to the statement, the company said in a letter that the proposal will lead to total destruction of the local industry that supports growth and strengthens the country's economy.

General Tyre in the letter written to FPCCI President Zakaria Usman said the proposal, instead of representing every segment of the industry, mostly favoured those traders who import tyres and sell in the local market. These traders, the letter added, do not play any significant part in stabilising macroeconomic indicators.

In fact, economic activities like job creation, foreign direct investment, technology transfer, market development, human resource development, training, research and development and production expansion plans are hit by imports.

General Tyre also urged the FPCCI to be more impartial in future submissions, and reissue the statement, correcting the damage that has been done by recommending policies in favour of traders. The tyre industry serving the nation for the last 50 years produces almost all the required sizes, but it was not even consulted while drafting the proposal.

Local industry faces hardship, standing against high input cost, under invoicing, and smuggling, however, it has been promoting business and industrial development.

Unfortunately, the most significantly affected local manufacturing sector was not represented fairly in the FPCCI's budget proposal.

Reduction in duty will only kill government revenues, because the government has already been getting only 20 % or thereabouts of actual revenues. Rampant under invoicing is one of the reasons for low revenues, a subject that the FPCCI has kept quiet on due to the influence of traders present in FPCCI, the letter alleged.

It was also communicated that the suggestion of doing away with sales tax registration requirement is also against the government. There is an urgent need for the government to enforce complete documentation of the economy, so that all such underhand deals and the associated people are exposed.

General Tyre also highlighted that the local tyre industry has the potential to meet the demand of every size of the tyre market. The local tyre industry produces 36 sizes of tyres in different categories like passenger cars, light trucks, heavy trucks, agri-tyres etc, and 75 % of total imports during 2012-13 were of these very sizes giving a tough time to local production.

GTR further noted that the FPCCI, being the premier body in the country, does not even have proper import statistics. The total market demand for tyres in the country was 8.2 million in 2012-13, GTR added.

GTR urged FPCCI president to reissue the budget proposal statement by taking all stakeholders on board, and giving the tyre industry's concerns a prominent space in the larger interest of the nation, while vowing for a documented economy and promotion of legal and ethical practices to help the government.

Source: Daily "The News International”, Karachi; 14 May 2014
(Syed Rashid Ali, Karachi, Pakistan)