The Prime Minister Shehbaz Sharif-led government has permitted the commercial import of old, used vehicles up to five years old, extending from the previous three-year limit, as reported by The News on Saturday.
This development emerged after a meeting of the Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla. During the session, Secretary Commerce Jawad Paul informed the Senate panel that while the period for importing old/used vehicles under the Baggage Scheme remains unchanged (allowing overseas Pakistanis to import three-year-old vehicles), the commercial import of five-year-old vehicles will be allowed starting September 1.
However, there will be an additional tariff protection of 40% on such vehicles in FY 2025-26. This means the tariff will be capped at 50% from the earlier average tariff of 90%. Over the next four years, this 40% additional import tariff on used and old vehicles will gradually be brought down to zero. In the future, the import of six to seven-year-old vehicles will also be permitted. The government intends to maintain specific quantities and standards to ensure that these older vehicles do not contribute to environmental problems within the country.
Senator Mandviwalla expressed his view that the same five-year age limit should apply to both vehicles imported under the baggage scheme and commercial imports. He advocated for equal treatment for overseas Pakistanis and commercial importers regarding vehicle imports. The commerce secretary acknowledged that the gift scheme was being misused in the import of old and used vehicles.
Pension Income to Be Taxed and Amendments to Income Tax for Banking Sector Approved
Meanwhile, the National Assembly’s Standing Committee on Finance and Revenues, chaired by Syed Naveed Qamar, approved a proposal to bring pension income exceeding Rs10 million into the tax net at a rate of 5%.
The NA panel also sanctioned proposed amendments to the Income Tax in the Seventh Schedule, which grants special treatment to the banking sector. The FBR (Federal Bureau of Revenue) has put forward five amendments aimed at disallowing banks from incorporating expenses related to tax payments, including those for rented bank buildings and advances to non-performing loans.
Focus on Electric Vehicle Manufacturing and New Automobile Levy Structure
It’s noteworthy that Pakistan aims to increase the manufacturing of electric vehicles (EVs) to 2.2 million units over the next five years, primarily focusing on electric motorbikes.
Recently, as reported by the publication, the National Assembly’s Standing Committee on Finance was informed about a proposed three-tiered levy structure for new automobile purchases: 1% for vehicles up to 1300cc, 2% for those between 1301 and 1800cc, and 3% for those over 1800cc. Committee members expressed shock upon learning that these charges were subsequently omitted from the official Finance Bill 2025–2026.
