ISLAMABAD: The Commerce Ministry has formally removed the five-year age restriction on commercial imports of used vehicles with effect from July 1, 2026, following a federal government decision, while the domestic automobile industry has urged the government to tighten controls on personal import schemes, warning that their alleged misuse is threatening local manufacturing and investment.
In an Office Memorandum issued on October 30, 2026, the Commerce Ministry informed the Federal Board of Revenue (FBR) that the age limit applicable to commercial imports of used vehicles had ceased to apply after June 30, 2026.
The clarification was issued in response to an FBR memorandum dated October 23, 2026, seeking clarification regarding the applicability of the age restriction on commercial imports of used vehicles beyond June 30, 2026.
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According to the Commerce Ministry, the Economic Coordination Committee (ECC) of the Cabinet and the Federal Cabinet had initially allowed commercial imports of used vehicles falling under Pakistan Customs Tariff (PCT) codes 8702, 8703, 8704 and 8711, subject to a maximum age of five years, until June 30, 2026.
The permission was subject to compliance with environmental and safety standards prescribed by the Ministry of Industries and Production through the Engineering Development Board.
The government decision had stipulated that the age restriction could be removed thereafter.
Accordingly, the Commerce Ministry has confirmed that the five-year age limit for commercial imports of used vehicles stands removed from July 1, 2026, subject to compliance with other applicable provisions of the Import Policy Order, regulatory requirements and prescribed standards.
The memorandum, signed by Tayyab Shaheen Bhatti, Section Officer (Import-II), was addressed to Rashid Mahmood, Secretary Revenue Division and Chairman FBR.
The clarification is expected to facilitate commercial importers of used vehicles by removing uncertainty over the continuation of the age restriction beyond June 2026.
However, the removal of the age limit does not exempt commercial imports from other applicable regulatory, environmental and safety requirements.
Meanwhile, Pakistan Automotive Manufacturers Association (PAMA) has urged the government to review the Gift Scheme for used vehicle imports, alleging that its misuse is undermining domestic manufacturing, employment and future investment.
In a letter to Secretary Commerce, PAMA Director General RaziurRehman called for immediate safeguards against misuse of the scheme and a reassessment of policies encouraging excessive imports of used vehicles at the expense of local manufacturing.
According to the letter, used vehicle imports under the Gift Scheme increased sharply from seven units in May 2026 to 806 in June, 1,876 in July, 1,406 in August and 2,238 in September.
PAMA claimed that the Gift Scheme accounted for around 98 per cent of total used vehicle imports in September, while imports under the Transfer of Residence Scheme remained negligible during the same period.
The association said the sharp shift in import patterns raised serious concerns about whether the Gift Scheme was being used beyond its intended purpose of facilitating overseas Pakistanis.
It maintained that it supported genuine facilitation measures for overseas Pakistanis under SRO 61(I)/2026, dated January 15, 2026, but called for a comprehensive review of certification, verification and monitoring mechanisms governing used vehicle imports.
Rehman said Pakistan’s automotive industry had invested more than Rs1 trillion in developing domestic manufacturing capabilities and achieving localisation.
The sector, he said, now comprised more than 31 brands, over 100 models and 13 manufacturing plants, supported by a local supply chain enabling localisation of around 60 per cent in many vehicle categories.
He warned that the continued expansion of used vehicle imports under schemes intended for personal use threatened these investments and undermined the government’s broader objectives of industrialisation and import substitution.
PAMA also expressed concern over recent tariff reforms under the National Tariff Policy, arguing that reductions in import duties and depreciation of up to 60 per cent on used completely built-up (CBU) vehicles were eroding the competitive space available to domestic manufacturers.
“These measures discourage local manufacturing, technology transfer, employment generation, and future investment in Pakistan’s automotive sector,” the letter said.
Rehman further observed that the near-complete shift in used vehicle imports from the Baggage Scheme to the Gift Scheme within a few months raised serious questions about procedures used to certify and approve vehicles overseas.
He said the change in import patterns appeared to indicate widespread and coordinated activities involving certifications that enabled large volumes of used vehicles to enter Pakistan under the Gift Scheme.
PAMA urged the government to examine existing mechanisms to ensure that the scheme was used strictly for its intended purpose and did not become a channel for commercial vehicle trading.
The association said effective monitoring and safeguards were necessary to protect domestic manufacturing, preserve employment opportunities and sustain investment in Pakistan’s automotive sector.
Copyright Business Recorder, 2026
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