Used Car Age Limit Removed; Gift Scheme Imports Hit 98%

Government Removes Five-Year Age Limit on Commercial Used Vehicle Imports

The Ministry of Commerce has formally abolished the five-year age restriction on commercial imports of used vehicles from July 1, 2026, while local automobile manufacturers have called for stricter controls over the alleged misuse of personal vehicle import schemes.

In an Office Memorandum issued on October 30, the ministry informed the Federal Board of Revenue (FBR) that the age limit was no longer applicable after June 30, 2026. The clarification followed a request from the tax authority dated October 23.

Earlier, the Economic Coordination Committee (ECC) and the federal cabinet had allowed commercial imports of used vehicles under Pakistan Customs Tariff codes 8702, 8703, 8704 and 8711, subject to a maximum vehicle age of five years until June 30, 2026.

The restriction was scheduled to end after that date, provided imports complied with the Import Policy Order and environmental and safety requirements set by the Engineering Development Board.

The ministry's clarification was addressed to FBR Chairman Rashid Mahmood.

PAMA raises concerns over personal import schemes

Meanwhile, the Pakistan Automotive Manufacturers Association (PAMA) has called for stronger monitoring of the Gift Scheme, claiming that it is increasingly being used as a channel for commercial vehicle imports.

In a letter to the commerce secretary, PAMA Director General Raziur Rehman highlighted a sharp rise in vehicle imports through the scheme. According to the association, imports increased from just seven vehicles in May to 806 in June, 1,876 in July, 1,406 in August and 2,238 in September.

PAMA stated that the Gift Scheme accounted for approximately 98% of all used vehicle imports in September, while imports under the Transfer of Residence Scheme remained negligible.

The association questioned the significant shift from the Baggage Scheme to the Gift Scheme and called for a review of overseas certification, verification and monitoring procedures.

Automobile industry warns of impact on local manufacturing

PAMA said Pakistan's automobile industry had invested more than Rs1 trillion in domestic manufacturing, with over 31 brands, more than 100 models and 13 manufacturing plants. Localisation levels have reached approximately 60% in several vehicle categories.

The association also expressed concerns about tariff reductions under the National Tariff Policy and depreciation allowances of up to 60% on imported used completely built-up vehicles. It argued that these measures were weakening the competitive position of locally manufactured vehicles.

While supporting genuine facilitation for overseas Pakistanis under SRO 61(I)/2026, PAMA urged the government to introduce safeguards to prevent personal import schemes from being used for commercial trading.

The association warned that uncontrolled imports of used vehicles could negatively affect domestic manufacturing, employment, technology transfer and future investment in Pakistan's automobile industry.