In a major policy shift, Pakistan and the International Monetary Fund (IMF) have reached an agreement to abolish tax-free car import schemes as part of ongoing loan program talks. The decision includes scrapping the baggage and gift schemes and tightening the Transfer of Residence scheme.
Under the new arrangement, commercial imports of five-year-old used cars will be allowed, but with strict safety checks and conditions. The IMF has set a deadline for the Economic Coordination Committee (ECC) to approve the changes by the end of this month.
For the Transfer of Residence scheme, vehicles can only be imported from a country where the individual has lived for at least one year, closing loopholes that were often misused. Officials noted that many cars, whether from Japan or the UK, were first routed through Dubai before arriving in Pakistan.
This development comes as Pakistan and the IMF are set to wrap up review talks for the $7 billion Extended Fund Facility and the $400 million tranche under the Resilience and Sustainability Facility.
Meanwhile, both sides are still discussing the release of the Governance and Corruption Diagnostic (GCD) Assessment report, which remains a sensitive issue. A task force has shared recommendations to strengthen anti-corruption measures, including asset declaration rules for civil servants, legal reforms, enhanced coordination between NAB and FIA, and improved training for investigators.
The reforms are also aimed at tightening oversight of state-owned enterprises and improving public sector governance. This move is expected to bring greater transparency while aligning Pakistan’s import and governance policies with IMF conditions.
