IMF approves import of 5-year-old vehicles from Sept 2025

June 20, 2025 (MLN): The International Monetary Fund (IMF) has approved the federal government’s proposal to permit the import of five-year-old vehicles starting from September 2025, officials from the Ministry of Commerce informed the Senate Standing Committee on Finance during a briefing on Tuesday.

Under the new policy, these vehicles will be subject to an additional 40% duty initially.

However, this extra levy will be reduced by 10% each year beginning in the fiscal year 2026-27, and eventually abolished altogether, leaving only the standard import duties in place.

Furthermore, from FY27 onward, the import of vehicles up to seven years old will also be allowed, as per the press release issued.

Officials further clarified that the previous restriction on importing vehicles older than three years has now been lifted.

However, the additional 40% duty will not apply to vehicles imported under the baggage scheme, though such imports will require a minimum overseas stay of 700 days.

In a separate development, the Senate committee rejected proposed amendments to the Public Finance Management Act (PFMA) put forward by the Ministry of Finance.

Ministry officials explained that the current legislation grants financial powers to institutions as delegated by Parliament, but the committee directed the ministry to redraft the proposed changes.

During the session, Senator Anusha Rehman raised concerns over the handling of surplus profits and idle cash, urging that all public and autonomous entities should fall under the audit scope of the Auditor General of Pakistan.

In response, the ministry agreed to revise the terminology in the proposed legislation from “business entities” to “public entities” and acknowledged the need for amendment.

Additionally, finance officials disclosed that the Port Qasim Authority had refused to transfer surplus funds when requested, directing the Ministry to consult the relevant division, which, according to officials, has yet to respond.

Meanwhile, the Federal Board of Revenue (FBR) briefed the committee on ongoing customs reforms.

Member Customs Operations reported that customs duties have been reduced on 35% of tariff lines.

New proposed duty slabs of 5%, 10%, and 15% will replace the current tiers of 3%, 11%, and 16%.

Moreover, duties on 916 additional tariff lines will be brought down to zero, increasing the total number of zero-rated items to 3,117.