Pakistan tightens vehicle import rules under IMF guidelines

The International Monetary Fund (IMF) has called for the strictest-ever regulatory framework for the import of vehicles into Pakistan, urging authorities to enforce rigorous quality, safety and compliance standards, according to officials familiar with the matter.

Pakistan’s Ministry of Industries and Production has decided to implement stringent criteria and enhanced scrutiny for vehicle imports starting July 1, in line with guidelines shared by the IMF, sources said.

The IMF has stressed that vehicles failing to meet safety and quality standards should not be allowed into the country. It has also recommended that non-filers and individuals not registered in the tax system be barred from importing vehicles.

Under the proposed mechanism, only companies holding a National Tax Number (NTN) will be permitted to import vehicles. These companies must also be registered under the Companies Act 2017.

Individual traders and private persons will no longer be eligible to import vehicles, the sources added.

Importers of used vehicles will be required to register with the Engineering Development Board. Vehicles without a functional after-sales service network, genuine spare parts, or trained maintenance personnel will not qualify for import approval.

Commercial importers will need to provide documented proof of after-sales services, availability of original spare parts, and trained technicians. They will also be required to demonstrate access to modern diagnostic facilities to address potential defects in imported vehicles.

Authorities will mandate pre-shipment inspection certificates to ensure that vehicles meet quality standards and do not contribute to environmental pollution. Fitness and quality testing certificates must also be submitted before import.

Additionally, importers will be required to obtain a post-shipment inspection certificate upon arrival of the vehicle.

Commercial importers of used vehicles will be obligated to maintain comprehensive digital records and ensure transparency of engine numbers, chassis numbers and vehicle identification numbers (VINs), according to the sources.

Potential reduction in import duties

In a separate development, Pakistan’s federal government has begun considering reductions in import duties for the upcoming fiscal year, as part of broader trade reforms linked to commitments with the International Monetary Fund, according to official sources.

The IMF has urged Pakistan to eliminate non-tariff barriers to ensure that local industries have better access to raw materials, a key step toward improving industrial productivity and export competitiveness.

Sources said the upcoming federal budget may include changes to 76 Harmonized System (HS) codes aimed at promoting international trade. The government is also planning to abolish more than 2,600 non-tariff barriers in total.

Measures to reduce import duties are expected to be introduced through the annual finance bill. Several sectors, including textiles, leather, pharmaceuticals, automobiles and chemicals, could be affected by the proposed removal or revision of these 76 HS codes.

Officials said the government has assured the IMF that non-tariff barriers will be gradually phased out. Under the plan, 2,662 such barriers listed in the Export Policy Order and Import Policy Order are targeted for elimination by June.

The overall process, including either complete removal or simplification of these barriers, is expected to be finalized by November, the sources added.