The federal government has imposed an additional 40 percent regulatory duty on the commercial import of used vehicles, following cabinet approval. The Federal Board of Revenue issued a notification confirming the decision, clarifying that this duty will apply in addition to all existing import duties already being charged on imported cars.
According to the official notification, the extra duty will remain in place until June 30, 2026. Starting from the following fiscal year, the duty will be reduced gradually by ten percent each year, ultimately reaching zero by June 30, 2029. This phased reduction plan aims to provide relief to the automobile market over time while ensuring stable revenue collection in the short term.
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Furthermore, the Ministry of Commerce has already issued a notification granting permission for the commercial import of used cars, aligning with recent amendments in the Import Policy Order 2022. Initially, only vehicles less than five years old will be allowed for import until June 30, 2026, after which the age restriction will be removed entirely, opening the market to a wider range of vehicles.
The government has made it clear that the permission to import vehicles will remain strictly conditional on compliance with environmental and safety standards. This requirement reflects increasing concerns about road safety and air pollution, ensuring that imported cars meet modern efficiency benchmarks. Authorities expect that these conditions will improve the overall quality of vehicles entering the Pakistani market.
It is worth noting that the Economic Coordination Committee (ECC) had approved the proposal for allowing commercial import of used cars during its meeting held on September 24. The ECC decision reflects the government’s broader efforts to balance consumer demand with economic considerations, as rising prices of new cars have created challenges for middle-income buyers across the country.
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Through this policy shift, the government intends to regulate the influx of used vehicles, protect local industry interests, and provide consumers with greater variety in the auto market. However, the additional regulatory duty is expected to increase upfront prices for imported cars, creating short-term pressure for buyers, while the gradual duty reduction plan could make imports more affordable in the long run.