Pakistan has reportedly agreed with the IMF to end the Personal Baggage and Gift car-import schemes and tighten the Transfer of Residence route, as part of negotiations with the IMF over its $7 billion Extended Fund Facility (EFF) and $1.4 billion Resilience & Sustainability Facility (RSF) loans.
Media reports confirm that the IMF urged the cancellation of these schemes to prevent the misuse of special import channels for bringing vehicles into the country.
Pakistan will eliminate the Baggage and Gift schemes, while the Transfer of Residence scheme will continue, but with stricter rules. The government plans to extend the “minimum stay abroad” requirement before a person can import a car under the Transfer of Residence scheme.
According to sources, the government is expected to issue an SRO on October 15 to formally end the Baggage and Gift schemes. Once issued, the two long-standing import schemes will be officially discontinued.
Before this decision, the government opened a commercial route for used-car imports by issuing SRO 1895(I)/2025 on September 30, which amended the Import and Export (Control) Act, 1950. It allowed the import of vehicles up to five years old.
To ensure fair taxation, an additional 40% Regulatory Duty (RD) was imposed on top of existing taxes and customs duties. This was made official through SRO 1898(I)/2025, issued by the Federal Board of Revenue (FBR) on October 1, 2025.
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