Age limit for import of used cars increased

Decision not to apply to imported cars awaiting clearance.


Express December 09, 2010

ISLAMABAD: The government has enhanced the age limit for import of used cars from three to five years under special schemes in an attempt to break the monopoly of local car manufacturers.

According to a notification issued on Thursday, used cars up to five years of age can now be imported under the personal baggage, gift and transfer of residence schemes.

At present, the import of used vehicles is permitted only under special regimes.

The decision will take effect immediately, said the commerce ministry spokesperson.

He clarified that used cars already imported but not yet cleared by the customs department will not be entitled to the age relaxation.

“The decision is in favour of the public and will break the monopoly of local manufacturers,” said Shahzad Malik, president of the Lahore Chamber of Commerce and Industry’s finance and taxation committee.

He believes the decision will not have a negative impact on the domestic used car market but will help in lowering the rates of new vehicles.

The Competition Commission of Pakistan (CCP), in its automobile sector study, has highlighted the anti-consumer practices of the car manufacturing industry, where local assemblers have constantly been increasing prices over the years and the government seems to have assumed the role of a silent spectator.

The age relaxation recommendation was part of this year’s proposed trade policy, which was supposed to be announced in July.

However, the policy is yet to see the light of day and perhaps for the first time in its history, the country stands without formal annual export and import targets.

As per existing rules, in order to be eligible for importing a used car under the personal baggage scheme, a minimum stay abroad of six months within the last seven months is required.

In order to gift a vehicle to relatives, the requirement is at least two years of stay abroad during the preceding three years. Moreover, a vehicle may be gifted only to a family member residing in Pakistan.

Under the special regime, taxes are levied on the basis of engine capacity, irrespective of the vehicle’s value and optional/additional accessories.

Published in The Express Tribune, December 10th, 2010.

COMMENTS (4)

imran salamat | 10 years ago | Reply the poloicy is good, but i wana know the rate of tax to be applied on 1300cc cars?
Talha Khan | 10 years ago | Reply We should make a financial statement for every person for their capability of have a car for himself. The problem is that the local manufacturers are charging too much money with inferior quality cars and now with the option of imports, our country will face the increase in import bills. The foreign currency reserve will be depleted by the use of unnecessary imports of cars. The annual tax return should be made compulsory for the purchase of luxury item in Pakistan for at least next 10 years. The four wheel car can only be given to a person who pays more then Rs 75000 tax per annum. This will help our country with cash generation and every person will drive the car with respect without congestion on the road. The amount of tax should be transferred to education and health department for so that we can manage our literacy rate and health rate to improve.
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