Duty-Free Vehicle Permits for MPs
116 MPs have requested the government to issue duty-free vehicle permits. The proposal is reportedly now on the president's desk. If approved, it would make them eligible for tax exemptions in the millions on imported vehicles.
In a move that has stirred significant controversy, 116 Members of Parliament (MPs) have requested the government to issue duty-free vehicle permits. This proposal, currently on the president's desk, if approved, would make these MPs eligible for tax exemptions amounting to millions on imported vehicles.
The privilege of duty-free vehicle import permits is not limited to MPs. Top public servants, military personnel, and university professors also receive duty-free vehicle permits, but their tax-exempt allotment is capped at Rs. 3.6 million. However, for MPs, there is no meaningful upper limit, as the limit is set to allow the import of the highest-end vehicle possible.
These permits are transferable, which allows MPs to either sell them to the highest bidder or import vehicles themselves and then sell them at market price, earning substantial profits. This practice has raised concerns about the ethical implications and financial impacts of such privileges.
The practice of MPs profiting from duty-free permits is not new. In 2010, nearly one-third of the Parliament (65 MPs) sold their permits to businessmen for amounts ranging from Rs. 12 million to Rs. 17 million each. Some MPs imported vehicles by themselves and sold them at market price. For instance, a high-end Toyota Prado purchased for Rs. 7 million with a duty-free permit could be sold for Rs. 30 million on the open market at the time.
In 2016, the practice repeated itself. At least 75 MPs imported luxury vehicles, including BMWs, Land Cruisers, Mercedes-Benz, and even Hummers, under the duty-free permit scheme. For each vehicle, the tax exemption alone cost taxpayers a staggering amount ranging from Rs. 30 million to an - Rs. 44.7 million.
In 2020, media reports surfaced alleging that MPs had accepted cash advances from prominent businessmen, promising to sell their duty-free vehicle permits even before receiving them. However, the newly elected Parliament that year did not receive these permits due to the prevailing economic crisis and the temporary ban on vehicle imports to safeguard foreign exchange reserves. It is likely those MPs who have now completed five years in office are spearheading the current push for the reinstatement of these lucrative duty-free vehicle permits.
List of MPs who imported vehicles in 2016 using the tax-free permits. 👇
