Representatives of car assemblers and leasing companies were meeting finance ministry officials today in an attempt to resolve the issue of 1.5 percent tax on cars sold through leasing companies.

According to the Dawn newspaper, spokesmen for the Pakistan Automotive Manufacturers Association (PAMA) and the Leasing Association of Pakistan (LAP) said that the finance ministry had invited negotiations though it was not known if finance minister Shaukat Aziz, the finance minister, would be at the meeting.

Members of LAP and the auto assemblers met commerce minister Razzak Dawood on Tuesday to give details of the suspension of lease car sales. This had been requested so the minister could take up the issue with the finance ministry and the Central Board of Revenue (CBR).

Leased car sales have been suspended for 10 days due to the 1.5 percent sales tax imposed by the CBR, Dawn said.

The newspaper also said that the CBR is now evaluating the situation, but has yet to call members of LAP to Islamabad, although the organisation has sought an appointment with the CBR chairman.

PAMA Chairman Mr. Jawaid Shaikh said the collector of sales tax had imposed the tax at a time when the auto sector had begun to show signs of growth after a long period of decline.

17,183 cars were sold in July-December 2000 compared with 14,730 units in 1999.

Mr. Shaikh said that the sales decrease would most certainly result in job losses and a substantial reduction in revenue for the government.