There has been a lot of commotion in local used car market since the government issued SRO 1067(1)2017. Under the new SRO, the authorities have tried to clamp down on those who were misusing used car import schemes, Baggage, Gift and Transfer of Residence. The main purpose of this SRO was to curtail the import of used car in Pakistan, which is one of the main reasons the trade deficit of the country keeps on rising. We deciphered and reported the SRO long time back; however, a rumor has started to spread on social sites stating that in 2018 the import of used cars will shut down entirely, which is indeed false.
The commerce secretary Younus Dagha also said in November while taking to ET that government was not trying to stop the import of used cars let alone trying to shut it down completely. He said,
“We want to discourage unnecessary imports at this time to curtail the growing trade deficit.”
It is false notion that government is trying to halt car import, it only has strengthened rules so that only genuine overseas Pakistanis can bring vehicles in the country as these schemes were originally developed to cater the needs of Pakistanis living abroad.
According to the new rules, all vehicles in new/used condition to be imported either under personal baggage, gift or TR scheme, their duty, and taxes will be paid out of foreign exchange arranged by owners or local recipient supported by bank encashment certificate showing the conversion of foreign remittance to local currency.
Pakistanis imported about 56,000 cars in 2015-16 fiscal year and 65,000 in 2016-17, which led the government to impose strict import policy to reduce trade deficit in the current fiscal year which is ending on June 30, 2018.
Moreover, the commerce secretary also said that one could see the change in used car imports starting next year. Analysts have asserted that this new SRO has undoubtedly hit used car market, it will not halt the import of cars, but under new SRO it will be difficult to import cars in the country.
The purpose of writing this article was to inform people that government in no way is planning to halt the import of cars from 2018, but is planning to curtail it to filter out country’s trade deficit.