ISLAMABAD – The government is considering reducing taxes on used car imports in the upcoming federal budget. This move is aimed at making imported vehicles more affordable for the public. The plan will be part of the 2025-26 budget, which is set to be presented today. Sources say the proposal was also shared with the International Monetary Fund (IMF) for review.
As part of this plan, vehicles up to five years old may be allowed for import. This is a change from previous limits. The government also aims to reduce Regulatory Duties (RD) and gradually remove Additional Customs Duty (ACD). These changes are part of a larger reform strategy under the Customs Act. They hope these steps will benefit car buyers and the overall auto market.
Officials have suggested cutting tariffs on used cars by 10 percent every year. They also recommend that no new duties be imposed on the auto sector. The goal is to support buyers and remove extra costs that raise car prices. Moreover, this reform may attract more competition and better options in the market.
The government is also planning to remove non-tariff barriers in the auto industry. These include hidden rules that make it harder to import cars. By eliminating them, car imports could become faster and smoother. Officials believe these steps will make the sector more open and fair.
By 2030, the average tax on the auto sector may fall below six percent. This would be a major drop compared to current rates. The government hopes this long-term plan will modernize the car industry and make vehicles more accessible. All eyes are now on the budget announcement in the National Assembly later today.