The International Monetary Fund (IMF) has greenlit the federal government’s plan to allow the import of five-year-old vehicles starting in September 2025, as confirmed by the Ministry of Commerce during a briefing to the Senate Standing Committee on Finance.
As part of this policy, a 40 percent additional duty will initially be applied to these vehicles.
However, this extra charge will be gradually phased out, reduced by 10 percent each year, and completely removed by fiscal year 2026-27, after which only standard import duties will apply.
Moreover, from FY27 onward, cars up to seven years old will also be allowed for import.
The restriction on importing vehicles older than three years has officially been lifted. Notably, the 40 percent duty will not apply to vehicles brought under the baggage scheme, though such imports will require proof of a 700-day overseas stay.
In a separate matter, the committee rejected changes proposed by the Ministry of Finance to the Public Finance Management Act (PFMA).
Ministry officials defended the current law, which grants financial authority to institutions via Parliament. However, the committee pushed back and instructed them to revise the amendments.
Senator Anusha Rehman raised concerns over how idle funds and surplus profits are managed, insisting that all public and autonomous bodies should come under the audit scope of the Auditor General of Pakistan.
In response, the ministry agreed to adjust the language in the bill, changing “business entities” to “public entities,” and acknowledged the need for improvements.
Finance officials also disclosed that the Port Qasim Authority had refused to transfer surplus funds upon request. When the ministry contacted the relevant department, they received no reply.
On the customs front, the Federal Board of Revenue (FBR) shared progress on reforms. A senior customs official stated that duties have been cut on 35 percent of tariff lines, and new duty slabs of 5%, 10%, and 15% will replace the existing 3%, 11%, and 16% tiers.
Furthermore, 916 additional items will now be zero-rated, raising the total number of duty-free tariff lines to 3,117.