If you are expat planning to buy your loved one his favourite imported car, then you have to pay customs duty in dollars, according to a new policy announced on Tuesday.
The Economic Coordination Committee, the top government body on economic decisions, has approved a new policy on import of vehicles. Under this policy, the duty and taxes on all imported vehicles, whether new or used, will be paid on dollars.
The personal baggage or gift scheme allows expats to bring home the cars they bought in a foreign country or gift them to friends or family in Pakistan. But this scheme was misused by traders who have turned it into a business by importing multiple cars on one passport for commercial purpose. Importing cars result in drain of dollars and inflate our import bill, something the government can not afford because of a large trade deficit (loss).
The decision has been taken to support State Bank’s foreign exchange reserves, which stand at $7 billion, said an official of the ministry of finance while speaking to SAMAA Digital.
According to the decision, the expats will have to arrange for dollars to pay this duty while local recipients will require bank encashment certificate, showing conversion of foreign remittances to the local currency.
Among other issues on the agenda, the ECC approved regulatory amendments in the Export Policy Order 2016 and Import Policy Order 2016 as proposed by Commerce Division aimed at increasing ease of doing business.
The ECC also approved the withdrawal of customs duty, additional customs duty and sales tax on the import of cotton effective from February 1 to June 30 to ensure sufficient supply to the cotton industry.