Explained: Why Pakistan bans used-car imports under Personal Baggage Scheme

Dubai: Pakistan has abolished the Personal Baggage Scheme for importing used vehicles for overseas Pakistanis, while retaining the Gift and Transfer of Residence schemes under stricter conditions aimed at preventing their commercial misuse.

Pakistan’s Commerce Minister Jam Kamal Khan confirmed the changes in the National Assembly, saying the revised policy had been approved by the Economic Coordination Committee and the federal cabinet.

The government said the Personal Baggage Scheme had originally been introduced to facilitate overseas Pakistanis importing vehicles for personal use but was increasingly being used for commercial purposes.

Under the revised policy, overseas Pakistanis can continue to import vehicles through the Gift and Transfer of Residence schemes, but must meet tougher eligibility requirements.

The interval between vehicle imports has been increased from two years to three years, while vehicles imported under the schemes cannot be transferred for one year.

Applicants must also have stayed abroad for at least three years, with a minimum of 850 cumulative days of stay.

Vehicles imported under the two schemes must meet the minimum safety, environmental and regulatory standards applicable to commercial imports of used vehicles.

The requirement that a vehicle must be imported from the country where the sender resides will now apply only to the Transfer of Residence Scheme.

According to information provided by the Pakistan Foreign Office, cars up to three years old and other vehicles up to five years old can be imported under the schemes.

Motorcycles and scooters can only be imported under the Transfer of Residence Scheme.

The Gift Scheme has also been expanded to allow overseas Pakistanis to gift vehicles to brothers and sisters, in addition to parents, spouses and children.

Overseas Pakistanis holding a Pakistan Origin Card (POC) are also eligible to import vehicles under the applicable schemes.

However, students receiving remittances from Pakistan, non-earning members of Pakistani nationals living abroad and people who have imported, gifted or received a vehicle during the previous two years are not eligible.

The government has also clarified that the schemes do not provide a blanket exemption from duties and taxes.

Finance Minister Muhammad Aurangzeb told the National Assembly in a separate written response that there is no provision allowing the import of cars or other vehicles without payment of customs duties and taxes in any part of Pakistan.

A separate facility allows a new car with an engine capacity of up to 1,350cc to be imported without duty for a disabled person, subject to recommendations from the Federal Board for Disabled Persons.

The Commerce Ministry said the policy changes followed consultations with stakeholders, including the Ministry of Overseas Pakistanis and Human Resource Development.

It said the revised rules were intended to facilitate overseas Pakistanis importing vehicles for genuine personal use while ensuring that the benefits reach bona fide beneficiaries and preventing the schemes from being exploited for commercial purposes.

The revised policy was introduced through SRO 61(I)/2026 dated January 15, 2026.

The ministry said it was too early to assess the impact of the changes on overall vehicle imports, although imports could decline following the abolition of the Personal Baggage Scheme and tighter conditions under the remaining schemes.

Main points: What is banned, what is allowed and what about taxes?

Personal Baggage Scheme for used vehicles has been abolished. Overseas Pakistanis can no longer import a used car through this route.

Vehicles imported under the remaining schemes cannot be sold or transferred for one year after import.

Used vehicles can still be imported under:

Gift Scheme

Transfer of Residence Scheme

Cars must not be more than three years old, while other vehicles can be up to five years old.

Motorcycles and scooters are allowed only under Transfer of Residence.

The Gift Scheme can cover parents, spouse, children, brothers and sisters.

Overseas Pakistanis holding a Pakistan Origin Card (POC) are also eligible under the applicable schemes.

The minimum overseas stay has been raised to three years, with at least 850 cumulative days abroad.

The gap between vehicle imports has been increased to three years.

Vehicles under the remaining schemes must meet applicable safety, environmental and regulatory standards.

Under Transfer of Residence, the vehicle must come from the same country where the overseas Pakistani resides.

The schemes do not mean duty-free car imports.

Finance Minister Muhammad Aurangzeb has clarified that there is no provision anywhere in Pakistan allowing cars or other vehicles to be imported without payment of duties and taxes.

The exact duty/tax bill depends on the vehicle and the applicable customs/tax regime, so the older figures for duty rates should not be presented as current 2026 rates without verification.

A separate concession remains for a new car of up to 1,350cc for a disabled person, subject to the required recommendation.