Pakistan Slams Brakes on Used Car Imports

The government is anticipated to implement various restrictions on second-hand car imports in the upcoming budget to boost the struggling sales of locally assembled vehicles, according to media reports.

The Federal Board of Revenue (FBR) is reportedly suggesting legal changes to prevent commercial importers from exploiting the passports of overseas Pakistanis. Currently, vehicles imported under the baggage scheme in the name of overseas Pakistanis are swiftly sold in commercial markets.

One proposal being considered is to prohibit the local sale of imported used vehicles in Pakistan for at least three years. Under the law, overseas Pakistanis can import vehicles under the personal baggage scheme, transfer of residence, and gift scheme, provided they have not imported, gifted, or received a vehicle in the past two years under the Import Policy Order (IPO) 2022.

Over the past 15 to 20 days, stakeholders in the auto industry have been actively engaging with Prime Minister Shehbaz Sharif and relevant ministries. They have also launched extensive media campaigns to argue against the increasing number of used car imports, citing negative impacts on the sales of locally assembled cars, local vendors, and employment.

Industry experts believe that the average monthly import of 3,085 used cars, totaling 30,679 units during the first 10 months (July-April) of FY24, compared to 4,701 units in FY23, has significantly affected the sales of locally assembled vehicles.

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