Pakistan abolishes used car import scheme amid misuse concerns

Pakistan's government has abolished the Personal Baggage Scheme for importing used vehicles, a move confirmed by Commerce Minister Jam Kamal Khan. The Economic Coordination Committee and the federal cabinet approved the decision, citing widespread misuse of the scheme for commercial purposes.

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The minister was responding during the National Assembly’s Question Hour to queries raised by MNA Dr Shazia Sobia, who asked whether the government had decided to abolish the Personal Baggage Scheme to prevent its commercial misuse and sought details of changes introduced in the vehicle import policy.

While the Personal Baggage Scheme is gone, the government has retained the Gift and Transfer of Residence schemes but with significantly tighter conditions. These revisions aim to curb commercial misuse and ensure that benefits are extended only to genuine overseas Pakistani beneficiaries. The revised policy mandates that vehicles imported under these schemes must meet minimum safety, environmental, and regulatory standards applicable to commercial imports.

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The revised policy required vehicles imported under the retained Gift and Transfer of Residence schemes to meet minimum safety, environmental and regulatory standards applicable to commercial imports of used vehicles.

Further restrictions include an increased interval for importing vehicles, now set at three years instead of two. Vehicles imported under these schemes will also be non-transferable for one year. The minimum stay-abroad requirement for all schemes has been enhanced to three years, with at least 850 cumulative days of stay. Additionally, the condition that a vehicle must be imported from the country of the sender's residence now applies only to the Transfer of Residence Scheme.

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The changes had been introduced after consultations with stakeholders, including the Ministry of Overseas Pakistanis and Human Resource Development.

The commerce ministry stated that these adjustments were made after consultations with stakeholders, including the Ministry of Overseas Pakistanis and Human Resource Development. The goal is to facilitate overseas Pakistanis importing vehicles for personal use while preventing the schemes' exploitation. The ministry acknowledged that it is too early to assess the full impact, but imports could decline due to the abolition of the Personal Baggage Scheme and stricter conditions on remaining schemes. Separately, Finance Minister Muhammad Aurangzeb clarified that no provision allows duty- and tax-free vehicle imports in any part of Pakistan.

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The policy adjustments were aimed at facilitating overseas Pakistanis seeking to import vehicles for genuine personal use, while ensuring that benefits accrued only to bona fide beneficiaries and discouraging misuse of the schemes.