In a bid to strengthen the value of Rupee against the dollar, the government of Pakistan has rolled out its new import policy for vehicles.
Under this policy, the government has decided to collect all the taxes and duties on imported vehicles in US dollar.
The Economic Coordination Committee (ECC) approved the policy on Tuesday.
Previously, the government’s Personal Baggage or Gift Scheme allowed international passengers to bring home the cars they bought abroad. Sending such items as a gift to a family member or friend was also allowed under the policy.
However, the government had to put heavy duties on imported cars as the policy was widely misused and people started to use it for commercial purposes.
According to experts, the business of imported cars results in a drain of millions of dollars, inflates import bills and also aids in the growing trade deficit, something the government cannot afford due to economic instability.
An official in the ministry of Finance has said on the condition of anonymity that the decision was taken to support the State Bank’s foreign exchange reserves, which have reached as low as $7 billion.
The policy is expected to come into effect after the announcement of the second mini-budget on January 23.