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Express Tribune
6 days ago
- Automotive
- Express Tribune
Govt rules out tax reversal on car imports
Listen to article In a bid to regulate the used car market and uphold quality standards, the government has decided not to reverse existing taxes on car imports and will introduce mandatory registration and certification procedures for used imported vehicles. These measures were communicated during a meeting chaired by Special Assistant to the Prime Minister (SAPM) on Industries and Production Haroon Akhtar Khan with the Car Dealers and Importers Association in Islamabad. As per an official statement, the discussions focused on key areas including the upcoming Auto Policy 2026, import and export issues, and additional customs duties. The PM's aide recognised the Car Dealers and Importers Association as a vital stakeholder in the consultation process for policy formulation. He reiterated that Prime Minister Shehbaz Sharif's vision emphasises promoting a liberalised and competitive import mechanism for vehicles in Pakistan. Highlighting the shift towards sustainable transportation, he stated that Pakistan is moving away from petrol-based vehicles towards environmentally friendly alternatives. In line with the prime minister's directives, the government has introduced a comprehensive Electric Vehicle (NEV) Policy 2025-2030. Under this policy, Pakistan aims to convert 2.2 million vehicles to electric by the year 2030. "The promotion of electric vehicles is crucial for reducing smog and improving public health," said Khan. "EVs are not only cost-effective but also beneficial for the environment and the people of Pakistan." During the meeting, the Association assured the ministry that they will submit detailed proposals to support the policy process. The SAPM assured the delegation that the government will carefully review their suggestions and extend full cooperation. Meanwhile, Rana Ihsaan Afzal Khan, Coordinator to the Prime Minister of Pakistan on Commerce, conducted a meeting with Patron in Chief, Chairman and representatives of the All-Pakistan Car Dealers and Importers Association (APCDIA) to strengthen collaboration between the private and government stakeholders. The APCIA, while appreciating the government's plans to allow import of commercial vehicles via amendments to the Import Policy Order, were of the view that consultations with the association could lead to formulation of a well-rounded policy for import of commercial vehicles. Afzal Khan assured the association that the Ministry of Commerce understands the importance of conducting stakeholder consultations and invited tangible proposals from the association for incorporation in the updated Import Policy Order, expected to be issued after September, 2025.
Business Recorder
6 days ago
- Automotive
- Business Recorder
Commercial vehicles' import: PM's rep talks to APCDIA team
ISLAMABAD: Rana Ihsaan Afzal Khan, Coordinator to the Prime Minister of Pakistan on Commerce, conducted a meeting with Patron in Chief, Chairman and representatives of the All-Pakistan Car Dealers & Importers Association (APCDIA) to strengthen collaboration between the private and government stakeholders. The meeting took place in light of the government's decision to allow import of up to five-year-old/used vehicles imported in commercial quantities along with 40 percent additional import tariff in budget (2025-26). The APCDIA, while appreciating the government's plans to allow import of commercial vehicles via amendments to the Import Policy Order, maintained that consultations with the Association could lead to formulation of a well-rounded policy for import of commercial vehicles. Import of up to 5-year-old used vehicles allowed with 40% extra tariff Rana Ihsaan Afzal Khan assured the Association that the Ministry of Commerce is alive to its responsibilities in conducting stakeholder consultations and invited tangible proposals from the Association for incorporation in the updated Import Policy Order, which is expected to be issued after September, 2025. Last week during review of Finance Bill (2025-26) Commerce Secretary Jawad Paul informed Senate Standing Committee on Finance that the time period for the import of old/used vehicles under the baggage scheme has not been changed and overseas Pakistanis can continue to import three-year-old vehicles under baggage scheme. The facility of five years has only been extended on the commercial import of old and used vehicles. From September 1, 2025, the commercial import of five years old vehicles would be allowed. However, there would be an additional tariff protection of 40 percent on such vehicles in 2025-26. In the next four years, the 40 percent additional import tariff would be zero on the import of used and old vehicles. The 40 percent additional import duties during 2025-26 would be reduced to 30 percent in subsequent fiscal year and finally zero-percent duty in coming years. The quantity and standards would be maintained to ensure that old and used vehicles should not create environment related problems in the country. However, the government must ensure that 40 percent additional tariff should not be applicable on the import of five-year old vehicles under the baggage scheme. The commerce secretary stated that the gift scheme is being misused on the import of old and used vehicles. Copyright Business Recorder, 2025
Business Recorder
16-06-2025
- Business
- Business Recorder
Import, re-export of defence vehicles: ECC approves amendments to import policy order
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved amendments to the Import Policy Order (IPO) 2022 to allow import and subsequent re-export of defence related vehicles/helicopters/assemblies by State-owned Defence entities and the wholly-owned commercial subsidiaries, sources close to the Secretary Commerce told Business Recorder. Sources said the Ministry of Commerce briefed the ECC in its last meeting that the Special Investment Facilitation Council (SIFC) had approached the Ministry for amending the Import Policy Order (IPO), 2022 to allow import and subsequent re-export of defence related vehicles/helicopters/assem-blies by State-owned Defence entities and the wholly owned commercial subsidiaries. Meetings were held in SIFC on the request of two companies, ie, M/s Aero Solutions and M/s Margalla Heavy Industries Ltd wherein concerned Ministries/Divisions including Commerce, Defence, Defence Production, Industries & Production and Federal Board of Revenue (FBR) had supported the proposal with the objective to enhance export potential in the defence sector. FBR imposes new levy on locally-made, imported vehicles For the determination of the Input-Output Ratios (IORS) of defense-related technologies under the Export Facilitation Scheme (EFS), it was decided that the requirement of determination of IORS through EDB may be waived off keeping in view the sensitivities of defense export projects, and as an alternative IORS for the defense export projects may be determined through a committee constituted by MoDP. Amendment for the same in relevant Custom Rules is already under process vide Financial & Accounting Mechanism for Pak - KSA Defence Projects and Similar Other Defence Projects Under Export Facilitation Scheme (EFS) 2021. Ministry of Defense Production (MODP) in this regard has already suggested the composition of said committee to determine the input-output. FBR to share the said notification with all relevant stakeholders and the SIFC once notified. In pursuance to the proposed amendments shared earlier by SIFC, the Ministry of Commerce had provided its input with the caveat that the provisions to allow import of defence related vehicles/helicopters/assemblies shall be for the purpose of re-export only. Also, that the State-Owned Defence entities and their wholly owned commercial subsidiaries would have to register with the Export Facilitation Scheme (EFS), 2021 of FBR to benefit from any customs duty exemptions. In line with the proposals shared by SIFC vide its letter of March 21, 2025, the following amendments were proposed in the Import Policy Order (2022); (the relevant provisions of IPO, 2022 wherein these amendments had been proposed in the summary: Copyright Business Recorder, 2025
Business Recorder
15-05-2025
- Automotive
- Business Recorder
FBR may allow import of 5-year-old used vehicles
ISLAMABAD: The Federal Board of Revenue (FBR) is considering a proposal to allow import of up to five years old and used vehicles in the coming budget (2025-26) to promote competition in auto industry. Sources told Business Recorder that the proposal is to extend the current age limit on imported used vehicles from three years to five years across the board. Presently, the government allows the import of used cars up to 3 years old and SUVs up to 5 years under special schemes. The new policy may standardize the age limit to five years for all vehicle categories. Gwadar Port, GFZA: FBR allows duty, tax-free import of vehicles In the last budget for 2024-25, a 15% RD was imposed on imported used cars exceeding 1,300cc. The government is also examining the proposal to gradually phase out regulatory duties and slash tariffs on Completely Built-Up (CBU) vehicles to below 10 percent, with a broader goal of bringing auto-sector tariffs down to single digits within five years. According to a tax expert, the FBR has already taken appropriate checks to control misuse of the import of old and used vehicles. The personnel baggage scheme, transfer of residence and gift scheme were reportedly misused on the import of old and used vehicles. Under the law, the overseas Pakistanis are entitled to import vehicles under personnel baggage scheme, transfer of residence and gift scheme who have not imported, gifted or received a vehicle during the last two years under Import Policy Order (IPO), 2022. The Board had clarified that customs department will not charge 18 percent sales tax on auction of serviceable old and used vehicles in case sales tax has been paid at the time of local or import stage. However, sales tax would be charged on auction of unserviceable/ condemned old and used vehicles from the bidders, irrespective of the fact that sales tax has already been paid on such imported or locally purchased vehicles, FBR added. Copyright Business Recorder, 2025
Business Recorder
07-05-2025
- Business
- Business Recorder
Barter trade with Iran, Afghanistan: Senate panel assails MoC for proposing permanent EIF exemption
ISLAMABAD: The Senate Standing Committee on Commerce on Tuesday strongly criticised senior officials from the Ministry of Commerce for proposing a permanent exemption from the Electronic Import Form (EIF) for barter trade with Iran and Afghanistan— an act that may breach US sanctions. Neither Commerce Minister Jam Kamal nor Secretary Commerce Jawad Paul attended the meeting, citing other pressing engagements. Their absence drew further ire from the Committee, which was chaired by Senator Anusha Rahman Ahmad Khan. The Commerce Ministry's team, led by Additional Secretary Nasir Hamid, declined to share the draft summary intended for the Economic Coordination Committee (ECC) of the Cabinet. Hamid cited procedural rules that prohibit the sharing of such documents at any forum prior to ECC approval. Pakistan, Iran vow to meet potential $10bn trade target in coming years However, the Ministry informed the Committee that two separate summaries had been circulated to the Ministry of Finance, Federal Board of Revenue (FBR), and the State Bank of Pakistan (SBP) for feedback. Officials clarified that no EIF exemption had been proposed for non-Iranian origin goods, as regular banking channels are available with those countries, in line with the SBP's letter dated April 9, 2025. Currently, imports of Iranian-origin goods are exempt from the EIF requirement until May 15, 2025. This exemption— limited to specific commodities— is being extended for 45 days at a time under High Court directives. 'We need a permanent solution to the EIF issue,' said Additional Secretary Hamid. 'The FIA is pursuing Commerce Ministry officials over alleged complicity in smuggling from Iran and Afghanistan. Pakistani banks are reluctant to process such trade for fear of penalties.' The Committee expressed strong reservations about the Ministry's request to exempt certain barter transactions from the Import Policy Order (IPO) 2022, the EIF, and financial instruments required under SBP regulations— including Chapter 13 of the Foreign Exchange Manual and Circular No. 5/2-16 dated August 9, 2016. These provisions currently apply to imports of Iranian goods via land routes until formal banking channels are established. 'I don't think the ECC or SBP will approve an EIF exemption due to the sanctions,' said Chairperson Senator Anusha Rahman. 'This request is unjustified. You're asking ECC to do something that falls afoul of US sanctions. If it were legally feasible, we wouldn't have needed the EIF two years ago. You are knowingly proposing a measure the SBP cannot support. Don't embarrass the government by pushing for what cannot be done.' She urged the Ministry to identify and address the obstacles facing traders and noted that there must either be a clearly defined barter trade policy or compliance with the existing Import Policy Order. 'We formed a sub-committee to explore ways to facilitate barter trade, but its report has yet to be submitted,' she added, demanding a timeline for its completion. Joint Secretary Waqas Azeem informed the Committee that three meetings had been held and final recommendations would be submitted by next Tuesday. Additional Secretary Hamid reiterated the Ministry's intent to find a lasting resolution for trade with Iran. The Committee also discussed the matter of approximately 1,200 trucks stranded in Balochistan, reportedly carrying goods not permitted under the current barter trade policy. Haji Fojan Barech, Chairman of the Dry Fruits Importers Association, claimed the trucks held dry fruits worth millions of dollars. However, the Ministry questioned the authenticity of his claims regarding both the contents and the number of vehicles. In a sarcastic remark, Senator Saleem Mandviwala suggested writing to the High Court for a 'lifetime exemption' from the EIF if the Ministry fails to find a workable solution. 'Currently, no formal mechanism exists for trade with Iran,' he added. 'There's more smuggling than legitimate trade because of our flawed policies.' Senator Hamid Ali Khan emphasised the need for formalised trade with Iran and Afghanistan, stressing that smuggling— especially in Balochistan— must be curbed. The Ministry of Commerce is currently reviewing the existing barter trade SRO in consultation with stakeholders. Three meetings have already been held by the committee established to identify gaps in SRO 642(1)/2023, which governs the B2B barter trade mechanism. Key decisions from the last meeting held on April 7, 2025, include: (i) elimination of the current list of importable/ exportable items in SRO 642(1)/ 2023 and alignment with the IPO/ EPO 2022 and prescribed conditions; (ii) the Ministry of Foreign Affairs will provide a list of items/ entities sanctioned by the US, UN, and other organisation; and (iii) FBR will propose amendments to enable transfer of credit between contracting parties for netting off goods' value. Chairperson Rahman remained unconvinced by the Ministry's presentation. 'This issue needs to be addressed at a higher level— beyond the comprehension of those in this meeting,' she said. After over an hour of discussion, the Committee agreed to hold a joint meeting with the Finance Minister, Commerce Minister, and Governor SBP to resolve the EIF exemption and barter trade mechanism. A representative from the Policy Research Institute of Market Economy (PRIME) presented data estimating the financial impact of smuggling and the informal economy at Rs 751 billion. However, the figures related to tobacco and pharmaceuticals were contested by Senator Faisal Rehman and representatives from the Pharma Association. According to a press release, the committee directed the Ministry of Commerce to fast track summaries initiated for barter trade and for the import policy order. The Committee members directed the ministry to resolve the confusion on trade with Iran, Russia and Afghanistan through a barter system, vs the parallel trade ongoing under IPO. Senator Saleem Mandviwalla reiterated the strategic importance of barter trade in tackling cross-border smuggling, stating barter trade from Iran and Afghanistan will help prevent smuggling. Affected traders added that over 1,200 trucks have been stalled at the border, loaded under barter terms, with sesame and rice exported without involving dollar payments. The Committee also constituted a Sub-committee comprising of Senators Zeeshan Khanzada, Sarmad Ali and Faisal Rahman to provide recommendation on the tobacco sector. It was also agreed that the issue of counterfeit medicines will be reviewed by the Standing Committee on Health. Trade and Investment Officers (TIOs) posted abroad also briefed the committee on potential trade opportunities, marking a continued commitment to expanding Pakistan's global trade footprint. Present at the meeting were Senators Sarmad Ali, Faisal Saleem Rehman, Bilal Ahmed Khan, Hamid Khan, Amir Waliuddin Chishti, Saleem Mandviwalla, Zeeshan Khanzada, and Muhammad Tallal Badar, along with senior officials from the Ministry of Commerce representatives from the private sector, and trade officers posted abroad. Copyright Business Recorder, 2025
