Fact-check: Has Pakistan lifted the ban on import of luxury cars?

Multiple social media accounts have alleged that Pakistan has banned the import of medicines into the country, but the import of luxury vehicles is allowed.

The claim is misleading.

Claim

On January 8, a Twitter user posted a picture of Prime Minister Shehbaz Sharif and wrote: “The person who used to say that he would sell his clothes if he had to in order to give people flour at cheaper rates is not allowing the opening of letter of credit for medicines, but has allowed it for BMW cars.”

The tweet had been viewed nearly 200 times, at the time of writing.

The same claim was shared by another Twitter user.

Fact

The minister for finance told the national assembly that though the government had prohibited the import of luxury cars last May, Pakistan’s central bank does not impose a ban on the import of luxury items. Thus, for now, the government was discouraging the import of luxury cars by increasing taxes on them.

As for medicines, the minister said that in December banks were told to prioritise the import of essential items like food, medicines, energy and agricultural products.

On April 17, during a question and answer session at the national assembly, Ishaq Dar, the minister for finance and revenue, was asked by parliamentarian Aliya Kamran if the government had decided to open the letter of credit (LCs) for luxury vehicles.

A letter of credit (LC) is an assurance from the bank guaranteeing that a buyer’s payment to a seller will be received on time.

Dar told the lower house that the Ministry of Commerce banned the import of 33 items on May 19, 2022. These included mobile phones, vehicles, home appliances and 30 other luxury item groups.

Then, three months later, on August 19, 2022, the Ministry of Commerce lifted the ban on certain items, asking banks to prioritise the import of food, pharmaceuticals, energy etc.

Banks were also advised to restrict the import of luxury items to save precious foreign exchange of the country, Dar added.

“However, the State Bank of Pakistan (SBP) does not impose a ban on the import of luxury items,” the minister told the national assembly.

Thus, in order to discourage the import of luxury items a customs duty of 100%, along with regulatory duty and 35% additional customs duty has been imposed on the import of luxury cars, he added.

The minister for finance further explained that as per the State Bank currently most of the cars being imported into Pakistan fall under three categories: personal baggage, transfer of residence or as a gift.

Since 2019, one of the conditions for importing cars was that duty and taxes will have to be paid from abroad and in the form of foreign remittances, he stated.

For now, the State Bank had suggested to the ministry that if it wanted to suspend import of vehicles for two years, it would have to do it through the above-mentioned schemes.

On January 12, employees at Pakistani companies, which import BMW and Mercedes cars, also confirmed to Geo Fact Check that bookings for both cars were now open.

Additional Reporting by Muhammad Binyameen Iqbal

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