Pakistan’s Ministry of Commerce informed the Senate Standing Committee on Finance that the International Monetary Fund (IMF) has greenlit a new policy permitting the import of vehicles up to five years old, effective September 2025.
Under the approved plan, these imports will initially face a 40% additional duty, which will then decrease by 10% each fiscal year until being completely phased out. By FY 2026-27, the age limit for eligible vehicles will expand to seven years. Officials clarified that while the previous restriction on three-year-old vehicles has been removed, the additional duty will not apply to vehicles imported under the baggage scheme—though a mandatory 700-day overseas stay requirement remains in place.
Committee Rejects Proposed Amendments to Public Finance Law
In a separate development, the committee declined proposed changes to the Public Finance Management Act (PFMA) by the Finance Ministry. The existing law grants financial authority to institutions through parliamentary delegation, but senators demanded revisions to the draft. Senator Anusha Rehman raised concerns about surplus fund management, urging that all public and autonomous entities be subject to audits by the Auditor General of Pakistan. The Ministry agreed to amend terminology from “business entities” to “public entities” and acknowledged further corrections were needed.
Officials also disclosed that the Port Qasim Authority refused to transfer surplus funds upon request, directing the Ministry to approach the relevant division—which never responded.
Customs Duty Reforms Announced
The Federal Board of Revenue (FBR) provided updates on tariff adjustments, revealing that customs duties have been slashed on 35% of tariff lines. Proposed reforms include new duty slabs of 5%, 10%, and 15%, replacing the current 3%, 11%, and 16% rates. Additionally, 916 more tariff lines will become duty-free, increasing the total zero-rated categories to 3,117.
