Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla, was briefed by Federal Board of Revenue (FBR) officials regarding significant changes in the customs tariff structure for the upcoming fiscal year.

In a major policy shift, the government has decided to allow the commercial import of five-year-old vehicles starting from September 2025. However, these vehicles will be subject to an additional 40% customs duty, regardless of whether one or 200 vehicles are imported, officials said.

Officials from the Ministry of Commerce informed the committee that this is part of a broader adjustment in line with IMF requirements, under which import duties on vehicles will be reduced to zero over the next four years. To meet this target, there will be a 10% reduction in duty on imported vehicles each year.

Currently, the baggage scheme only permits the import of vehicles up to three years old. The committee has recommended extending this to allow five-year-old vehicles under both the baggage and commercial import schemes. However, a 40% additional tax will also apply to cars brought under the baggage scheme, commerce ministry officials added.

Officials also confirmed that older vehicles, up to six or seven years, may be allowed in the future under the new policy.

As part of the new auto policy, duties on imported vehicles are expected to decline significantly. “Tariff is a fundamental issue, and we need support on this,” said Finance Minister Muhammad Aurangzeb during the session.

On another note, the committee discussed duty exemptions for the import of grandparent chicken used in the poultry sector. The committee recommended lifting the duty, responding to industry demands. FBR officials mentioned the duty on this category only brings in around Rs. 30 million annually.

In addition, the FBR confirmed that tax on vehicles up to 850cc has been raised from 12.5% to 18%.

The meeting also highlighted the existing gift scheme, under which overseas Pakistanis can gift one vehicle to a family member, as explained by the Secretary of Commerce.

However, concerns were raised by Senator Shibli Faraz, who warned that such measures may lead people to delay imports until duties are eventually eliminated.