The International Monetary Fund (IMF) has urged Pakistan to review and tighten used car import schemes available to overseas Pakistanis, citing rampant misuse and loopholes, according to official sources.
The global lender has asked the government to strengthen eligibility conditions under the Gift Scheme, Personal Baggage Scheme, and Transfer of Residence Scheme, which currently allow Pakistanis living abroad to import used vehicles into the country.
🚗 40,000 Cars Imported Under the Schemes
In FY2024–25, around 40,000 used cars entered Pakistan through these special allowances — a figure the IMF believes indicates excessive exploitation of the system.
The Ministry of Industries and Production is reportedly weighing whether to discontinue all schemes except the Transfer of Residence Scheme, particularly after the government recently lifted the ban on commercial used car imports.
However, the Ministry of Finance prefers tightening rules rather than eliminating the schemes, while the Ministry of Commerce insists they are vital for overseas Pakistanis who wish to send vehicles home.
⚙️ Proposed IMF-Backed Changes
To curb misuse, the government is preparing to revise eligibility criteria for car imports under these programs.
Here’s what could change:
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Gift Scheme & Transfer of Residence Scheme: Minimum stay abroad likely to increase from 700 days to 850 days within the past three years.
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Personal Baggage Scheme: Minimum stay abroad to remain at 180 days in the last seven months.
Officials also confirmed there’s growing consensus that overseas Pakistanis should be able to import cars from any country, not just from where they currently reside.
🏭 Local Industry Concerns
Local automakers have long criticized these import schemes, arguing that the inflow of used cars undermines local production and demand.
However, sources counter that automakers’ revenues continue to rise yearly, even amid quality and pricing concerns in locally assembled vehicles.
🌍 IMF’s Broader Economic Context
The IMF’s recommendation comes as part of broader fiscal reforms meant to tighten trade governance, increase transparency, and reduce grey-market activities affecting Pakistan’s balance of payments.
This move aligns with other IMF policy pushes, including cutting subsidies, curbing import loopholes, and increasing tax efficiency.
