Islamabad, July 18, 2023 – Pakistan has imposed conditional duties and taxes on the import of motor vehicles by foreign diplomats. The Federal Board of Revenue (FBR) issued SRO 923(I)/2023 on Tuesday, notifying changes to the regime governing the import of motor vehicles by diplomats.
The latest notification amends SRO 577(I)/2006, which was issued on June 5, 2006. The FBR introduced a special category under the amendment, specifying the following conditions:
READ MORE: FBR Plans New Indemnity Bond to Facilitate Exporters
No duties and taxes will be levied if the vehicle is sold or otherwise disposed of after two years from the date of importation.
If the vehicle is sold or otherwise disposed of before the expiry of two years from the date of importation, 100% of duties and taxes will be levied at prevailing exchange rates and duties/taxes on the value determined in foreign currency at the time of importation.
READ MORE: Pakistan ATL Surges to 4.15 Million Following Cash Withdrawal Conditions Implementation
Under SRO 577(I)/2006, Pakistan previously granted exemptions from customs duties and taxes on vehicles, including motor cars, falling under specific headings of Chapter 87 of the First Schedule to the Customs Act, 1969, when imported into the country by diplomatic representatives or missions of foreign governments. However, the vehicles were subject to certain conditions, including obtaining prior permission from the Ministry of Foreign Affairs for any sale, transfer, or disposal within Pakistan.
READ MORE: FBR Invites Applications for Appointment of Advocates to Strengthen Legal Team
The Ministry of Foreign Affairs, upon approval by the Foreign Secretary, determined the authorization for local sale and the payment of customs duties and taxes based on the category of the diplomat’s country of origin, depending on reciprocity. The Ministry of Foreign Affairs also provides the FBR with copies of the sale permissions and authorizations for each vehicle.
READ MORE: High-level transfers rattle Pakistan Customs; FBR issues notification on Sunday
The introduction of conditional duties and taxes on the import of motor vehicles by foreign diplomats reflects a shift in the taxation regime to ensure compliance and fairness in the importation and subsequent disposal of vehicles within Pakistan.
