Auto imports under personal baggage

EDITORIAL: The Personal Baggage Scheme for used vehicle imports has finally been abolished after the government concluded that a facility meant for overseas Pakistanis was being misused for commercial purposes. The Economic Coordination Committee and federal cabinet have approved the change, while the Gift and Transfer of Residence schemes will continue under tighter conditions. This is a sensible correction to a system whose concessions had increasingly become vulnerable to exploitation by people they were never designed to benefit. There was always a legitimate case for allowing overseas Pakistanis returning home, or sending vehicles to their families, reasonable facilities to do so. The problem arose when preferential arrangements intended for genuine personal use created opportunities for commercial activity to enter through the back door. Once traders can effectively access concessions designed for individuals, the distinction between facilitation and commercial import begins to disappear, while those operating through regular channels are left facing a distorted playing field. The government is therefore right to close the Personal Baggage route rather than continue tolerating its abuse. It is equally sensible that it has retained the Gift and Transfer of Residence schemes instead of indiscriminately eliminating every facility available to overseas Pakistanis. The revised rules attempt to separate genuine beneficiaries from commercial operators by making eligibility more stringent. The import interval under the retained schemes has been increased from two years to three, imported vehicles will remain non-transferable for one year, and the minimum stay-abroad requirement has been raised to three years with at least 850 cumulative days overseas. Vehicles must also meet the minimum safety, environmental and regulatory standards applicable to commercial imports of used vehicles. These conditions should make it considerably harder to use individual eligibility as a convenient vehicle for organised commercial imports. But tightening rules achieves little if enforcement remains weak. Pakistan has no shortage of regulations that look impressive on paper and become remarkably flexible once commercial incentives and administrative discretion enter the picture. The authorities must therefore monitor the Gift and Transfer of Residence schemes closely to ensure that the business previously conducted through Personal Baggage does not simply migrate to the remaining channels. That means identifying unusual patterns, enforcing the one-year restriction on transfer and ensuring that eligibility requirements are verified rather than treated as another documentary formality. If organised commercial interests begin using proxies or other arrangements to circumvent the revised rules, the government should close those loopholes quickly. Otherwise, this reform will merely change the paperwork accompanying the same business. There is also a broader principle involved. Concessions granted for a specific public purpose should benefit the people for whom they were created. When they become commercial opportunities for unrelated parties, they distort markets, create opportunities for rent-seeking, and undermine confidence in the policy itself. Allowing such arrangements to continue simply because abuse has become established practice would be no justification at all. The commerce ministry says it is still too early to determine how the changes will affect overall vehicle imports, although it expects imports could decline. That impact should be monitored, along with the functioning of the two surviving schemes, so future policy can be based on evidence rather than lobbying from competing interests. For once, the government has recognised a loophole and moved to close it; the real test now is whether the baggage stays checked, or simply finds another way through customs. Copyright Business Recorder, 2026

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