IMF Allows Import of 5 Year Old Used Vehicles

The International Monetary Fund (IMF) has approved the federal government’s proposal to allow the commercial import of five-year-old vehicles starting from September 2025, officials from the Ministry of Commerce informed the Senate Standing Committee on Finance during a briefing today. Under the new policy, a 40 percent additional duty will be imposed on these vehicles initially. However, beginning in the fiscal year 2026-27, this additional duty will be reduced by 10 percent annually and fully abolished later, leaving only standard import duties. Furthermore, from FY27 onward, vehicles up to seven years old will also be eligible for import. Officials clarified that the restriction on importing three-year-old vehicles has been lifted. However, the additional 40 percent duty will not apply to vehicles brought under the baggage scheme. For such imports, a 700-day overseas stay condition will apply. Separately, the same committee rejected proposed amendments by the Ministry of Finance to the Public Finance Management Act (PFMA). Ministry officials stated that current law gives institutions financial powers delegated by Parliament, but the committee directed the ministry to redraft the amendments. Senator Anusha Rehman questioned the handling of surplus profit and idle cash, pushing for all public and autonomous entities to fall under the Auditor General of Pakistan’s audit jurisdiction. The Ministry agreed to revise the wording in the proposed law from “business entities” to “public entities” and acknowledged the need for correction. Finance officials also revealed that the Port Qasim Authority declined to transfer surplus funds when requested, directing the Ministry to consult the relevant division, from which no response was received. Meanwhile, the Federal Board of Revenue (FBR) shared updates on customs reforms. Member Customs Operations said customs duty has been reduced on 35 percent of tariff lines, and new duty slabs of 5 percent, 10 percent, and 15 percent are being proposed, replacing the current 3 percent, 11 percent, and 16 percent tiers. Additionally, duty will be reduced to zero on 916 more tariff lines, bringing the total number of zero-rated tariffs to 3,117.