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Aftab Maken
ISLAMABAD: Pakistan is set to see a significant shift in its automotive market and public finance management, following key approvals from the Ministry of Commerce and the Senate Standing Committee on Finance.
Starting September 2025, the commercial import of used cars will officially be permitted, marking a new era for consumers and a challenge for local manufacturers. The initial policy allows for vehicles up to five years old, with a graduated tax structure designed to ease the transition.
“It’s about striking a better balance,” Finance Minister Muhammad Aurangzeb stated previously, alluding to the long-standing protection enjoyed by local car manufacturers. While imported used cars will face a 40% tax and duty in the first year, these additional charges will be gradually reduced over the next four years. By 2026, the policy will expand to include vehicles older than five years, with all additional taxes on used cars phased out entirely over the four-year period.
Senator Saleem Mandviwalla has been a vocal proponent of these changes, even recommending that five-year-old vehicles be allowed under the more lenient baggage scheme, underscoring the growing consensus for broader access to affordable transportation.
This move is anticipated to democratize car ownership in Pakistan, offering consumers a wider array of choices and potentially more competitive pricing.
In a parallel development with significant implications for government revenue, the Senate Standing Committee on Finance has also approved critical amendments to the Public Finance Management (PFM) Act. These changes include a landmark provision making it mandatory for autonomous public institutions to deposit their surplus profits into the national treasury.
The committee meeting, chaired by Senator Saleem Mandviwalla, saw Senator Anusha Rehman champion the proposed legal modifications.
Senator Rehman vehemently argued that “autonomous bodies should not be allowed to hold on to surplus cash and must deposit any excess earnings into the national exchequer.” She called for the immediate implementation of the amended PFM Act and advocated for granting the Auditor General authority to audit these independent entities.
Officials from the Ministry of Finance clarified that autonomous institutions will be required to submit their surplus funds under the category of non-tax revenue. The committee also discussed allowing public sector entities to invest funds from their pension or provident accounts, with returns being reinvested into these funds.
Senator Rehman further suggested that grants provided to autonomous bodies should also be categorized as income, and that companies and autonomous institutions should be brought under the direct purview of the PFM Act, restricting their ability to make independent investments. She cited NADRA Technologies, a company formed by NADRA, as an example of an entity not currently depositing its income into the national treasury.
Ministry of Finance officials revealed that the Port Qasim Authority currently holds the largest cash surplus among public institutions, despite not transferring these funds to the national exchequer, highlighting the potential impact of these new regulations.
These reforms are expected to significantly enhance the national treasury’s resources by ensuring that the profits of independent public bodies contribute directly to the national exchequer.
