The International Monetary Fund (IMF) has approved a major change in Pakistan’s car import policy. Now, vehicles up to five years old can be imported. The decision ends the earlier restriction that only allowed imports of cars up to three years old. This new policy will take effect from September 2025.
The Ministry of Commerce shared the update during a briefing to the Senate Standing Committee on Finance. Officials clarified that this allowance applies to both personal and commercial vehicle imports. However, to discourage excessive imports, the government will apply an additional 40% duty on five-year-old cars.
Interestingly, cars brought in under the baggage scheme—used by overseas Pakistanis—will be exempt from the 40% additional duty. This step is expected to benefit Pakistani expatriates who often bring used vehicles while returning home. It also adds some relief for consumers amid high inflation and vehicle prices.
The policy includes a phased reduction in the extra duty starting from 2027. Each year, the duty will drop by 10% until it reaches zero by 2030. This gradual approach is designed to protect the local auto industry while giving consumers better access to affordable used vehicles.
Overall, the decision aims to balance public demand with economic stability. It supports IMF-led reforms by allowing more flexibility in imports while maintaining pressure on luxury spending. It could also help ease the demand for new vehicles and bring down market prices over time.