ISLAMABAD (PEN) : The government, under Prime Minister Shehbaz Sharif, has approved the commercial import of used vehicles up to five years old, extending the previous limit of three years. The change, announced by the Senate Standing Committee on Finance, will become effective from *September 1*.
Tariff Revision and Transition Plan
Commerce Secretary Jawad Paul addressed the Senate panel chaired by Senator Saleem Mandviwalla, stating that the *Baggage Scheme* remains unchanged—overseas Pakistanis may still import three‑year‑old vehicles. He confirmed that, from September, commercial imports of five‑year‑old vehicles will also be allowed.
A *40% additional tariff protection* will apply in the 2025‑26 fiscal year. This means the total tariff on such vehicles will drop to 50%, down from the current average of 90%. Over the next four years, the additional levy will be phased out, eventually reaching zero. The policy will later permit imports of six to seven‑year‑old vehicles, with quality and environmental safeguards in place.
Calls for Equal Treatment
Senator Mandviwalla urged uniformity in policy, saying, *“The same time period of five years should apply to the import of vehicles under the baggage scheme as well as commercial import.”* He emphasized equal treatment for overseas Pakistanis and commercial importers. The commerce secretary noted that *“the gift scheme was being misused on the import of old and used vehicles.”*
Related Fiscal Adjustments
At a separate session of the National Assembly’s Standing Committee on Finance and Revenues chaired by Syed Naveed Qamar, several fiscal measures were endorsed:
Pensions exceeding Rs10 million will be taxed at 5%.
Proposed amendments to the seventh schedule of the Income Tax Ordinance will modify tax treatment for the banking sector.
The Federal Board of Revenue issued five new restrictions disallowing deductions related to banks’ tax payments, rented buildings, and non‑performing loan advances.
Future Focus on Electric Mobility
Officials highlighted plans to ramp up electric vehicle production to *2.2 million units* over the next five years, particularly focusing on electric motorbikes. Additionally, the committee reviewed a planned *three-tier levy scheme*: 1% for vehicles up to 1,300 cc, 2% for 1,301–1,800 cc, and 3% for engines above 1,800 cc. The panel was reportedly surprised that these levies were not included in the official Finance Bill for 2025–26.
