ISLAMABAD: The government has decided to continue allowing expatriate Pakistanis to bring cars up to three years old on reduced customs duty under the new Automotive Development Policy 2015-20.

However, the age limit on the commercial import of special-purpose vehicles has been proposed to be restricted to five years under the new policy, a senior official of the Ministry of Industries and Pro­duction told Dawn on Wednesday.

The import of used cars is allowed under three schemes — as personal baggage (once in two years), bringing the vehicle into the country on transfer of residence from another country, and sending a vehicle as a gift to a family member residing in Pakistan (once in two years).

The official said the age limit of three years will continue to remain in case of cars, and five years in case of buses, vans, trucks, pickups, SUVs (sport utility vehicles) including 4x4.

But the facility of importing cars under these schemes was linked with some conditions, the official said, adding that the Federal Board of Revenue will issue a yearly schedule of import duties of all type of vehicles in US dollar terms on June 30 each year, and no relaxation regarding age and applicable duty will be granted under any circumstances.

Moreover, the Ministry of Commerce will define standing operating procedure (SOPs) under import policy order for used cars to prevent misuse of the facility. The official said this policy did not preclude import of brand new CBUs (completely built-up units) by individuals other than expatriate Pakistanis on payment of prescribed import duty.

In 2011-12, the import of used cars reached an all time high of 57,000 cars due to relaxation in age limit from three to five years. In the subsequent year, however, the age limit was reduced to three years and the imports dropped to 45,000 cars in 2012-13 and 29,000 in 2013-14.

The age limit will continue to be three years under the new policy as “it has produced desired results and provided enough protection to local players”, the official said.

Under the old policy, the import of special-purpose vehicles meant for the construction industry — including dumpers, water bowsers, sprinkler lorries, cement bulkers, prime movers and concrete mixers — was allowed at zero customs duty.

In the new policy, however, the age limit on the import of prime movers, concrete mixer lorries, dumpers designed for-off highway use and others including water sprinklers is proposed to be five years to protect the local industry, the official said.

“Most of these special purpose vehicles are converted into trucks and buses and sold at lower rates,” the official added. The policy is also said to have led to influx of substandard vehicles into the country.

This free import, according to the official, has also slowed down the pace of graduation from two-axle trucks to modern, fuel-efficient vehicles, which is essential for the country, especially in view of the envisaged China-Pakistan Economic Corridor.

Published in Dawn, September 17th, 2015

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