The federal government has revised the import policy to permit the commercial import of old and used vehicles up to five years of age from September 2025. According to reports, importers are currently not allowed to bring in cars older than three years.

 

Commerce Secretary Jawad Paul reportedly clarified during a meeting of the Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla, that the revised policy does not apply to vehicles brought in under the Baggage Scheme, which will continue to permit the import of vehicles only up to three years old.

 

For reference, the Baggage Scheme allows Pakistanis living abroad to import vehicles into Pakistan under specific conditions. These conditions include a limit on how many cars a person can import each year, and require them to have lived abroad for at least 180 days within the past seven months.

 

Reports indicate that in order to protect the local automobile industry, Islamabad intends to impose an additional 40 percent tariff on these older vehicles during the fiscal year (FY) 2025-26. However, over the next four years, this extra duty is expected to be reduced for old and new cars alike.

 

Reports suggest that the import of cars up to seven years old could be allowed in the coming years.  However, the authorities will likely ensure that strict quantity and environmental standards are maintained to avoid environmental harm.

 

Senator Mandviwalla stressed that overseas Pakistanis should be given the same five-year import window under the Baggage Scheme as commercial importers. 

 

Reports reveal that the commerce secretary outlined the strategic abuse of the existing gift scheme as an argument against the import of used vehicles.

 

In other automobile-related developments, the Senate Standing Committee on Finance was also informed of a planned three-tier levy on new vehicle purchases, though reports suggest that members were caught off guard when they realised these charges had not been officially included in the Finance Bill for FY 2025-26. 

 

The proposed levy structure includes a 1 percent charge for vehicles up to 1300cc, 2 percent for vehicles between 1301cc and 1800cc, and 3 percent for automobiles above 1800cc.

 

As per reports, Pakistan aims to boost electric vehicle production to 2.2 million units, mainly electric bikes, over the next five years.