ECC Defers Tougher Vehicle Import Rules Amid Concerns

ISLAMABAD: The federal government has postponed approval of proposed amendments to tighten vehicle import procedures under the personal baggage, transfer of residence, and gift schemes, citing concerns over their severity, according to reports.

During a Friday meeting, the Economic Coordination Committee (ECC) deferred the decision after stakeholders warned that the stringent measures could effectively halt vehicle imports. The Ministry of Commerce presented a summary to revise import procedures, but divergent views among stakeholders prompted the delay, with fears of unintended disruptions to imports.

The Commerce Ministry proposed restricting vehicle imports to those from the sender’s country of residence, a suggestion the Federal Board of Revenue (FBR) opposed, arguing that most senders reside in left-hand-drive vehicle countries, rendering the measure impractical.

The Ministry of Industries advocated abolishing the gift and baggage schemes, preserving only the transfer of residence scheme. Conversely, the Commerce Ministry pushed to retain all three but introduce safeguards against misuse.

Historically, commercial car imports were prohibited, leading to exploitation of these schemes for importing high-quality vehicles at competitive rates. To curb this, the Commerce Ministry suggested extending the import interval from two years to three years and imposing a one-year non-transferability condition on imported vehicles.

The most rigorous proposal was increasing the minimum stay abroad for eligibility from 180 days to 850 days across all schemes, alongside requiring vehicles to be registered in the sender’s name abroad to prevent third-party misuse.

Discussions also revisited the Prime Minister’s earlier proposal to scrap the gift scheme, but lack of consensus led ECC Chairman and Finance Minister Muhammad Aurangzeb to direct the Commerce Ministry to hold further stakeholder consultations before resubmitting the proposal.

The ECC’s decision underscores the need for balanced policies that curb misuse while ensuring fair access to vehicle import schemes.