Pakistan has abolished the Personal Baggage Scheme for importing used vehicles to prevent commercial misuse of the regulation.

This policy shift targets a loophole that allowed individuals to import cars under the guise of personal belongings, often bypassing standard commercial duties. By closing this channel, the government aims to ensure that all vehicles entering the country meet strict safety, environmental, and regulatory standards.

Commerce Minister Jam Kamal Khan said the decision in Islamabad on Jan. 4, 2026. The government is now focusing on curbing the practice of using personal schemes for profit-driven imports, which had previously allowed tens of thousands of vehicles to enter the country annually [1].

While the Personal Baggage Scheme is gone, the government has decided to retain the Gift and Transfer of Residence schemes. However, these remaining options will now operate under tighter conditions to ensure they are used for their intended purposes, rather than as commercial conduits.

Officials said the move is necessary to protect the domestic market and ensure that imported vehicles do not pose risks to public safety or the environment. The crackdown follows reports that the personal baggage route was being exploited by traders to flood the market with used cars while avoiding the taxes applied to formal commercial imports.

Under the new regulations, the scrutiny of vehicles arriving via the Gift and Transfer of Residence schemes will increase. This ensures that only genuine gifts or vehicles belonging to returning residents are permitted entry, effectively narrowing the window for unauthorized commercial activity.

“Pakistan has abolished the Personal Baggage Scheme for importing used vehicles to prevent commercial misuse.”

This policy change represents a broader effort by the Pakistani government to formalize the automotive import sector and increase tax revenue. By eliminating the Personal Baggage Scheme, the state reduces the prevalence of 'grey market' imports, which often bypass environmental checks and customs duties, potentially shifting demand toward newer, compliant vehicles or domestic production.