10% Federal Excise Duty on Pakistan’s first SUV “Fortuner”

ISSUE


Indus Motor Company launched Pakistan’s first locally manufactured SUV “Fortuner” but soon after the launch the project witnessed a sharp decline in the sales due to the introduction of 10% Federal Excise Duty in the budget of 2013-2014 which increased the price per unit of the vehicle by around half a million rupees making it unviable to consumers. This sudden increase in taxation jeopardised Rs 2 billion investment of IMC as plunging demand had put the company’s project on the verge of closure.

ROLE OF THE PASSAGE


To address this issue, The Passage team adopted an aggressive campaign, which comprised of media briefings, press releases and independent news stories, to bring into the notice of authorities that it was not only the company which is suffering due to these additional taxes but government is also losing substantial revenues due to decrease in sales in the shape of revenues that could help boost the economy in these critical times. Unpredictable auto policies by successive government was also highlighted as it was resulting in flight of capital. The issue was aggressively highlighted near budget and recommendations by auto sector were also published in print media.

OUTCOME


Through skillful and strategic feeding to the media, The Passage successfully gained the attention of concerned authorities and the effort proved fruitful when Finance Minister, Ishaq Dar, announced to remove the FED on locally manufactured SUVs in his budget speech of 2014-2015 to make it viable for the customers.