The Federal Board of Revenue (FBR) has modified rules about selling vehicles that diplomatic missions and embassies in Pakistan import. According to details, the diplomats can now sell these imported vehicles in the country after two years without paying any duties and taxes. However, if sold within two years of import, they have to pay 100% of prevailing duties and taxes.
This new modification has been introduced to a new SRO. 923(I) 2023 to amend SRO. 577(I) 2006, relating to the import of diplomatic vehicles. It is pertinent to mention that imported diplomatic vehicles in Pakistan are sold in Pakistan under three categories, i.e., Category I, Category II, and Category III, and now a new category under the name of “Special Category” has been introduced. For reference, here are a chart of categories:
The decision on the classification of a diplomat is made by the Ministry of Foreign Affairs, and it is based on arrangements made for Pakistani diplomats in other nations. Furthermore, approval from Foreign Secretary, Interior Ministry, FBR, a release letter, and NOC are essential for selling and buying diplomatic cars.
It is also important to mention that there is a market for such cars in Islamabad, where one can buy them after completing the due process. However, there are several incidents and reports where envoys have misused the privileges available under Vienna Convention. They have sold duty-free imported luxury vehicles to local businessmen. In 2020, Pakistan Customs seized nine expensive luxury vehicles that were imported by foreign diplomats- including an ambassador.
Recently, a case was reported about Bentley Mulsanne, confiscated in Karachi last year. The investigation revealed that the Bulgarian embassy imported the car, which was sold to a businessman in Karachi. You can read about the whole case here.
Special Category
According to media reports and sources, the Special Category is introduced for the Saudi Mission in Islamabad. Before this, the tax exemption was offered on sales of vehicles after three years. But now, the imported Saudi Mission vehicles can be sold tax-free after a time period of two years.
The media reports claimed that the Saudi ambassador requested a reduction in the tax exemption period. However, there is no official confirmation about it.
What do you think about this Special category on sale of imported diplomatic vehicles? Please tell us in the comments section.
