The Government of Pakistan is about to introduce a new policy of importing used cars, which would be applicable from October 1, 2025. The scheme launches a five-year commercial import policy with the aim of transforming the mechanism of importing used cars into the country.
Currently, foreign Pakistanis are allowed to import second-hand vehicles under two systems: the gift scheme and the personal baggage scheme. Under the new policy, both systems might be consolidated, whereas the Transfer of Residence scheme will stand apart.
This information was divulged by Commerce Secretary Jawad Paul while chairing a meeting of the National Assembly Standing Committee on Commerce.
Higher Duty on Older Cars
As per the proposal, five-year-old used vehicles will also pay an additional 40% duty during the first year under the new system. The duty will gradually decrease by 10% every year before phasing out within five years.
Parliament & Importers’ Concerns
Members of the Committee Usama Ahmed Mela and Gul Asghar Khan requested further information regarding how used and electric car imports would influence Pakistan’s foreign exchange reserves.
On their part, a delegation of used car importers, which was headed by Hassan Danji, presented their suggestions. They advised that the Engineering Development Board (EDB) should be kept out of commercial imports since this is actually under the control of the Ministry of Commerce. Importers also asked for a reduced rate of duty and suggested establishing a joint working group of government and importer representatives to enhance the policy.
Government’s Reply
The Commerce Secretary clarified that matters pertaining to the automobile sector are dealt with primarily by the Ministry of Industries, while his ministry is currently handling a number of key tasks.
Last but not least, Committee Chairman Jawed Hanif Khan consented to refer the issue to the National Assembly Standing Committee on Industries and Production, in addition to the recommendations provided by stakeholders.
