FBR Proposed Changes in “Temporary Import of Vehicles” Policy
The Federal Board of Revenue (FBR) has proposed changing the temporary importation policy of motor vehicles of the Customs Rules of 2001. In a letter, FBR noted that this policy, also known as Carnet De Passage, has been misused by a foreigner/expatriate Pakistanis. Before moving forward, let us discuss what Carnet De Passage is.
Carnet De Passage
The simple definition is that Carnet De Passage is a passport of your car or motorcycle. It entitles you to enter countries on this vehicle without paying import taxes. This passport is specifically designed for travelers, and it is like a transit or temporary import document. It is pertinent to mention that you cannot use it as an import document e.g., bringing your car in case of emigration from one country to another.
How to Get It?
The traveler needs to follow these simple steps to acquire Carnet De Passage:
- You go to your country’s Automobile Association (AA) and apply for this temporary passport.
- Depending on the size and value of your vehicle and the countries you want to visit, the AA calculates a deposit (which may vary from $1,000 to $10,000). The association keeps this deposit for the duration of your journey.
- The customs sign and stamp the document on entering and exiting a country. However, it is your responsibility to collect these stamps. Some customs have never seen this document, so you must guide them through the procedure.
- You will get your deposit back once you return to your country with your vehicle and Carnet De Passage.
- In most countries, this passport’s validity is one year and can be used in up to 25 countries.
- If you keep traveling for over a year, you must buy a new Carnet de Passage.
How was it Misused in Pakistan?
Talking to PakWheels.com, an industry expert said that earlier the policy was only for foreigners; however, the state altered it in 2021. Under the amendment, the government allowed dual nationals, i.e., Pakistanis who also hold the nationality of another country, to acquire Carnet De Passage during their visit or travel to Pakistan. “But people started misusing it as they brought the luxury cars to Pakistan under this policy and then never took them back; either they sold them or started using them as rent cars specifically,” he explained.
This resulted in a loss to the national exchequer as these cars arrived in Pakistan without import duties. “Hence, the government has decided to amend the policy once again,” the expert told us. He added that although it is a proposal for now, there are 99% chances it would be approved.
What Are Proposed Changes?
The letter by FBR has proposed the following changes in the current policy:
- The definition of “tourist” is redefined, and it means a foreign national who has no residence or occupation in Pakistan and whose stay in the country is not more than three months.
- The details of the importers’ passports and the imported vehicle will be recorded at the Custom-station of entry, and the officer in charge will inform FIA for the purpose.
- Retention in Pakistan and the export record will be recorded in Customs computerized system and informed to FIA.
- At the end of every month, the Customs official will check the status of all vehicles entered through customs stations. “The official will identify all outstanding vehicles after the expiry of the retention period and take all necessary steps to recover duties and taxes and seizure of these vehicles,” the letter read.
In conclusion, it seems that the people have once again misused a policy formed to facilitate tourists and a step to boost tourism in Pakistan.
What do you think about the change in the policy of temporary import of vehicles? Please share your thoughts in the comments section.