IMF wants tighter rules for car imports by overseas Pakistanis

The International Monetary Fund (IMF) has asked Pakistan to review the existing used car import schemes for overseas Pakistanis amid concerns of widespread misuse, sources have told Nukta.

Under the current regime, overseas Pakistanis who have spent between 180 and 700 days abroad can import used vehicles into the country under the Gift Scheme, Personal Baggage Scheme, and Transfer of Residence Scheme.

In the last fiscal year (2024-25), approximately 40,000 vehicles were imported under these schemes, raising red flags about potential abuse and loopholes.

The Ministry of Industries and Production is reportedly considering discontinuing all such schemes except the Transfer of Residence Scheme, especially after the government’s recent decision to lift restrictions on the commercial import of used vehicles.

However, the Ministry of Finance has proposed strengthening the existing eligibility criteria rather than eliminating the schemes, in an effort to curb misuse. Meanwhile, the Ministry of Commerce is reportedly against the scrapping of schemes altogether, citing their importance for overseas Pakistanis.

According to sources, the IMF team wants stricter eligibility criteria for importing vehicles.

In line with IMF directives, the government is now revising the requirements for vehicle imports under these schemes.

Under the Gift Scheme and Transfer of Residence Scheme, the minimum stay abroad requirement is likely to be increased from 700 days to 850 days within the past three years.

For the Personal Baggage Scheme, the minimum requirement is expected to remain unchanged at 180 days abroad within the last seven months prior to application.

There is reportedly a consensus among stakeholders that overseas Pakistanis should be allowed to import vehicles from any country, not just the country of their current residence.

It is also pertinent to note that Pakistan's local automakers have been requesting the government to review the three schemes, claiming that the increased inflow of imported vehicles is affecting the demand for locally assembled cars.

However, sources argue that despite these claims, the revenue of local automakers continues to grow each year, even as concerns persist over the quality and standards of vehicles assembled in Pakistan.