ISLAMABAD: The government has finalized its proposal to allow commercial imports of five-year-old used vehicles with an additional 40 percent duty in the first year, a move that has received conditional support from the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM).
In a letter to Special Assistant to the Prime Minister Haroon Akhtar Khan, PAAPAM shared its viewpoint on the policy, emphasizing fair competition, consumer protection, environmental responsibility, and fiscal integrity.
On depreciation allowance, the Association recommended that no depreciation—or a maximum of 0.25 percent—should be permitted, arguing that excessive depreciation causes significant revenue loss to the Federal Board of Revenue (FBR), particularly in cases involving nearly-new vehicles. It suggested enforcing a ceiling of 20 percent depreciation and restricting imports to vehicles graded 4, 5, or above to prevent environmental dumping and ensure consumer safety.
PAAPAM further proposed that the Import Trade Price (ITP) should reflect the manufacturer’s retail price in the country of origin, variant-wise and trim-specific, to prevent duty evasion.
The Association also insisted that pre-shipment inspection be made mandatory, approved in advance by the Engineering Development Board (EDB) or another competent authority, and enforced prior to shipment. Importers, it said, must ensure availability of spare parts and service centres in at least the top 15 cities by population, alongside a grievance redressal mechanism within the EDB, with penalties for non-compliance.
Additionally, PAAPAM called for all importing entities to be formally incorporated and subject to full regulatory oversight. It urged the government to abolish all special schemes for overseas Pakistanis once commercial imports are allowed, citing widespread misuse.
For consumer protection, PAAPAM recommended that restrictions on secondary sales—designed to curb the “on money” premium—should apply equally to imported used vehicles. It also stressed that all safety regulations applicable to locally assembled vehicles must be enforced on imports.
The Association suggested that the National Electric Vehicle (NEV) levy on used vehicles should be increased by 1 percent for each year of usage, effective at the time of import. It further proposed that, to qualify as “used,” a vehicle must have a minimum mileage of 10,000 km per year of age, making it eligible for depreciation.
PAAPAM maintained that these measures are essential to safeguard the interests of domestic manufacturers, protect consumers, ensure proper tax collection, and uphold environmental standards.
