Key Highlights:
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Major policy shift for overseas Pakistanis importing cars set for October 2025.
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The popular Baggage and Gift schemes may be merged into a new commercial import policy.
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Get ready for a new, sliding scale of additional duties on used car imports.
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An extra 40% duty kicks in the first year, decreasing annually until 2030.
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Lawmakers raise red flags over foreign exchange drain and impact on local auto industry.
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Concerns mount: Will a flood of used cars hurt Pakistan’s own car manufacturers?
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Big question: How will the new rules treat the import of Electric Vehicles (EVs)?
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The final decision is still pending, but change is on the horizon
According to Business Recorder, the government is considering merging the baggage and gift schemes, two popular avenues for overseas Pakistanis to bring used cars into Pakistan, into its upcoming five-year commercial import policy, set to launch on October 1, 2025.
Secretary of Commerce Jawad Paul revealed the plan during a meeting of the National Assembly’s Standing Committee on Commerce.
The discussion centered on the import of five-year-old used cars, which will face a 40% additional duty in the first year, with the duty gradually reduced by 10% each subsequent year.
What Are Personal Baggage and Gift Schemes?
To understand the impact of this change, it’s important to know how these schemes work today:
Personal Baggage Scheme
Overseas Pakistanis can bring back a used car when returning home, under certain conditions. This is usually meant for personal use and comes with specific tax and duty relaxations.
Gift Scheme
This allows overseas Pakistanis to send a used car as a gift to their family members in Pakistan, again under special duty rules.
These schemes were designed to help the diaspora support their families and enjoy some benefits when relocating or visiting Pakistan.
The New Commercial Import Policy
- Start Date: October 1, 2025
- Duty Structure: Extra duty on used car imports will gradually decrease each year.
| Year | Additional Duty |
| 2025–26 | 40% on top of existing taxes |
| 2026–27 | 30% |
| 2027–28 | 20% |
| 2028–29 | 10% |
| 2029–30 | 0% (only standard taxes apply) |
The Concerns Raised
During the discussions on the merger of the personal baggage and gift schemes with the new commercial import policy, members of the National Assembly Standing Committee on Commerce, Usama Ahmed Mela and Gul Asghar Khan, emphasized the need for a comprehensive briefing on several key issues.
Impact on Foreign Exchange Reserves
The committee members expressed concern about the potential strain on Pakistan’s foreign exchange reserves if a large number of cars are imported under the new rules.
Concerns Over Used Car Imports
There was also concern about the increased import of used cars under the new policy. The committee questioned whether this would harm local manufacturers and whether the market could handle a sudden influx of used vehicles.
Inclusion of Electric Vehicles (EVs)
Another major concern was the treatment of electric vehicles (EVs) under the revised import rules. With the growing importance of EVs globally, there is a need to ensure that the new policy takes them into account
How the New Policy Will Reshape Car Imports
Under the upcoming policy, both of these schemes may be “clubbed together” into the larger commercial import framework. The transfer of residence scheme (where overseas Pakistanis bring a vehicle while permanently moving back) is expected to remain separate.
The merger remains under discussion, and no final decision has been taken. If implemented, it would mark a significant shift in how overseas Pakistanis import vehicles into the country.
