Now the customs duty on imported cars is to be paid in dollars, as per a new policy announced on Tuesday.
The Economic Coordination Committee—the apex body of government that decides on economic matters has approved a new policy on the import of vehicles. Under this policy, the duty and taxes on all the imported automobiles, whether new or used would now be paid in dollars.
As per the personal baggage or gift scheme, it was permitted to the expats to bring back their cars to the homeland or give the automobile as a gift to the family living in Pakistan. However, this scheme was badly misused by the traders who have turned it into a business by importing multiple cars on just one passport for commercial reasons.
Import of cars led to a drain of dollars and hence resulted in inflation of the import bill, this is something which the government cannot at all afford owing to a large trade deficit.
The decision has been taken for supporting the foreign exchange reserves of the State Bank, which are presently at $7 billion, as informed by an official of the ministry of finance while conversing with SAMAA Digital.
As per the decision, the expatriates would have to arrange for dollars for paying the duty while the local recipients would be needing a bank encashment certificate, indicating the foreign remittances to the local currency.
The ECC has also given approval to the withdrawal of customs duty, additional customs duty and sales tax on the cotton import which is to be put into effect from the 1st of February until the 30th of June for making sure of enough supply to the cotton industry.