Govt Tightens Vehicle Import Rules for Overseas Pakistanis

The Economic Coordination Committee (ECC) of the Cabinet has imposed significantly stricter conditions on vehicle imports by overseas Pakistanis. The decision was made during a meeting chaired by Finance Minister Senator Muhammad Aurangzeb. The Commerce Ministry proposed that vehicles imported under the Transfer of Residence scheme must now be verified to originate from the same country where the sender resides. This measure aims to eliminate long-standing misuse of the scheme through third-country shipments. The restriction, however, will not apply to vehicles imported under the Gift scheme. Another major tightening concerns eligibility criteria. Overseas Pakistanis must now have spent at least three years abroad, totaling a minimum of 850 days, before they can import a vehicle under either scheme. Officials say this requirement ensures that only bona fide expatriates benefit from the concessions and prevents abuse by frequent travelers who do not genuinely reside overseas. These recommendations emerged after extensive inter-ministerial consultations that included the Federal Board of Revenue (FBR), Ministry of Industries and Production, Ministry of Finance, and Ministry of Overseas Pakistanis. The Ministry of Industries advocated discontinuing both the Gift and Personal Baggage schemes due to massive misuse and foreign exchange losses, while the Ministry of Overseas Pakistanis emphasized their importance for expatriate welfare. Ultimately, the Commerce Ministry proposed retaining only the Transfer of Residence and Gift schemes and discontinuing the Personal Baggage scheme. The ministry also recommended applying the same safety, environmental, and regulatory standards that govern the commercial import of used vehicles. To further curb misuse, the ministry suggested extending the mandatory gap between successive imports from two years to three and enforcing a one-year non-transferability period for all imported vehicles. According to a statement issued by the Finance Division, the ECC approved amendments to the vehicle import procedure, retaining only the Transfer of Residence and Gift schemes. Under the revised framework, commercial-import safety and environmental standards will apply, the intervening import period will be extended from two to three years, and imported vehicles will remain non-transferable for one year. Circular Debt Management Plan The ECC also reviewed the Circular Debt Management Plan for FY 2025–26, presented by the Power Division, aimed at ensuring financial sustainability and efficiency in the power sector. The committee directed the Power Division, in coordination with the Finance Division, to develop a medium-term plan to gradually reduce fiscal support. It also instructed the Power Division to establish a follow-up mechanism with DISCOs to ensure delivery of the targets committed to the government. Additionally, the ECC approved a proposal to revise the margins of OMCs and petroleum dealers on MS and HSD, adjusting them in line with the National CPI for 2023-24 and 2024-25, with increases capped between five and ten percent. Half of the increase will be paid immediately, while the remaining half will depend on digitization progress. The Petroleum Division is to report back by June 1, 2026. The ECC approved restrictions on chloroform imports due to its toxic and carcinogenic nature, allowing import only by pharmaceutical companies with a DRAP-issued NOC. A request by M/s Ghani Glass for a concessionary gas/RLNG tariff was rejected, as such subsidies are no longer permissible, and broader export-support initiatives are already underway. A Technical Supplementary Grant of Rs. 1.28 billion was approved for the Pakistan Digital Authority (PDA) to facilitate digital transformation and technological innovation across government departments. The release of funds as a technical supplementary grant for the development expenditure of the Cabinet Division for FY 2025–26 was approved, as proposed by the Interior and Narcotics Control Division. The Housing and Works Division was allocated Rs. 5 billion through a Technical Supplementary Grant for the current fiscal year. On a summary by the Ministry of National Food Security and Research, the ECC approved the creation of a special-purpose company to wind up PASSCO, settle its remaining liabilities, and manage its administrative and financial arrangements. The company will be dissolved once its mandate is fulfilled. In principle, approval was given for the release of budgetary allocation for PIA Holding Company Ltd. (PIAHCL) to meet pension and medical-related expenses of PIACL employees.