Five-Year Age Cap Removed: PAMA Raises Alarm Over Used-Vehicle Imports in Pakistan

Islamabad: Pakistan's Ministry of Commerce has confirmed through an Office Memorandum issued on 30 October 2026 that the five-year age limit on commercially imported used vehicles has ceased to apply after 30 June 2026. In plain terms, used vehicles can be imported without an age restriction from 1 July 2026 onward. The clarification came in response to a formal query the Federal Board of Revenue (FBR) sent to the ministry on 23 October, amid uncertainty at the customs clearance stage over how such shipments should be treated after 30 June.

A legal mechanism, not a new policy

The key point is that this is not a fresh policy decision. The original permission was explicitly time-boxed and contained a pre-agreed removal clause. The 30 October memorandum is therefore an implementing document, not a new concession. That is why there is no legal ambiguity: the date of 30 June 2026 was already inscribed, and the provision that the limit would not apply thereafter was already present. The memorandum's language says the limit 'ceased to apply' — it was not revoked; its term simply ran out.

Timeline: 30 June to 30 October

The sequence matters. After 30 June 2026 passed, it was still not clear to importers and customs officers what would happen to shipments of vehicles older than five years. On 23 October the FBR sought a written interpretation from the Commerce Ministry. Within a week, on 30 October, the ministry replied and issued the memorandum, whose effect was treated as retroactive to 1 July 2026. One practical implication is that importers may have held shipments during the period of uncertainty, making a short-term import surge plausible once clarity arrived. This remains a possibility only; no official data confirms it.

Environmental and safety conditions remain

Removal of the age cap does not mean everything is open. Environmental and safety standards still apply, in line with norms set by the Engineering Development Board and the Ministry of Industries. This is precisely where the real challenge emerges: with age-based filtering gone, the entire burden shifts to enforcement of these standards. Quality, road-safety and emissions checks on imported vehicles now test administrative capacity — and it is exactly this enforcement that the industry alleges is being bypassed through overseas certification.

The Gift Scheme: the centre of the dispute

The real controversy is not the age limit but scheme integrity. In a letter to the Secretary Commerce, the Pakistan Automobile Manufacturers Association (PAMA) alleges that the Gift Scheme, intended for overseas Pakistanis, is being used for commercial trade. According to the association, imports under the Baggage Scheme fell to just seven units between May and September, while imports under the Gift Scheme climbed to 2,238 units in the same period. PAMA claims that roughly 98 percent of total used-vehicle imports in September came through the Gift Scheme. The migration of an entire import stream from one channel to another within four months is a classic signal of channel arbitrage — not demand that has grown, but a route that has become cheaper or easier.

PAMA's allegations and demands

PAMA describes this as coordinated certification abuse, involving misuse of certificates issued abroad. The association is fighting on two fronts: closing loopholes in the Gift Scheme, and resisting tariff and depreciation reforms. It frames both as threats to industrialisation and import substitution. Its demand is clear: strict and independent verification of certification under the Gift Scheme, so that genuine personal use can be distinguished from commercial trade.

Tariff reform and depreciation

The second front is fiscal. PAMA alleges that customs duty cuts and depreciation provisions of up to 60 percent are narrowing the competitive space for domestic manufacturers. The direct effect is that an imported used vehicle not only becomes cheaper but undercuts a new domestic model on price. PAMA has called for a review of such measures under the National Tariff Policy.

The industry's scale: PAMA's bargaining asset

PAMA backs its case with hard numbers. According to the association, more than Rs1 trillion has been invested in the country's auto sector, 31 brands are present, 13 plants are operating, and localisation stands at roughly 60 percent. These figures are its core bargaining asset, used to reframe a narrow customs question as a matter of national industrial policy. To reinforce the argument, it cites the autoparts import bill, which it says can reach about Rs60 billion a year.

The government's position

The government's argument is one of facilitation: clarity for importers and convenience for overseas Pakistanis bringing vehicles for personal use. The ministry removed the age cap but retained the standards conditions, seeking to signal that facilitation and control can coexist. PAMA's stated fear is that the facilitation route becomes a channel for commercial trading. Neither side's claims have yet been tested against independent data, and that is the biggest gap in the debate.

Where the risks lie

Ranked by priority, the top risk is sectoral and industrial: rising used-vehicle inflows could erode domestic manufacturing and investment. Second is fiscal, where duty cuts and depreciation narrow the domestic competitive space. Third and most sensitive is integrity — coordinated abuse of overseas certification. Fourth is environmental and safety, since higher volumes raise the risk of standards being circumvented. Fifth is pressure on the import bill, and sixth is reputational — balancing genuine facilitation of overseas Pakistanis against the perception of abuse. Taken together, the overall risk rating is high, because an unconditional removal of the age cap, an explosive shift in Gift Scheme volumes and unresolved certification questions compound one another.

What to watch next

Three signals matter. First, FBR's monthly used-vehicle import data — if it diverges from PAMA's 98 percent claim, the abuse narrative will need re-examination. Second, the Gift Scheme review and any SRO amendments — new certification rules would change both import volumes and the domestic industry outlook. Third, changes in the National Tariff Policy — further duty or depreciation revisions would directly affect the domestic competitive space. It is equally important to watch whether the government formally responds to demands for an independent certification audit.

The need for verification

One caveat must be stated plainly: the import volumes and the 98 percent share are PAMA-sourced and have not been independently cross-checked against FBR customs statistics. Drawing structural conclusions from a five-month window would also be premature. The absence of FBR's own published import figures in the reporting further suggests the government has not yet publicly contested these numbers.

Conclusion

The end of the five-year cap is a technical step, but it has opened a larger policy debate — facilitation versus protection. The most urgent task now is an independent and transparent audit of Gift Scheme certification, so that genuine overseas Pakistanis are not harmed and commercial abuse is curbed. The next question is whether the Commerce Ministry holds its facilitation line or moves toward a review under industry pressure.