Cheaper used cars in Pakistan soon as govt cuts import Duty from Sep 25
ISLAMABAD – Auto enthusiasts can celebrate as Pakistan has revised its policy on older vehicle imports. After the approval of Budget 2025, importing five-year-old cars will soon become possible.
The government plans to allow the commercial import of vehicles up to five years old starting in September 2025. This move marks a major step in broader trade reforms designed to expand consumer choices and boost revenue through regulated imports.
Officials from the Ministry of Commerce shared the policy change during a briefing to the Senate Standing Committee on Finance. They confirmed that the government will impose a 40% additional duty on imported vehicles under the new scheme. This duty will decrease by 10% each year and will eventually be removed entirely.
The government has also planned to expand vehicle import limits by allowing imports of cars up to 7 years old, effectively ending the current restriction on vehicles over 3 years old.
Pakistan reached an understanding with the IMF to gradually lift restrictions on used car imports as part of a broader trade liberalization strategy. Under this plan, tariffs on used vehicles will start at 40% higher than those on new cars and will decrease by 10 percentage points each year until they are fully eliminated by 2030.
Imported Cars in Pakistan:
The government will implement these reforms under the new National Tariff Policy (NTP) 2025–30, which takes effect on July 1, 2025. The policy aims to lower trade barriers by phasing out Additional Customs Duties (ACDs), cutting Regulatory Duties (RDs) by 80%, and simplifying customs procedures. As a result, the average tariff rate will drop from 10.6% to 7.4% by FY2030.
Starting July 2026, the government will introduce a new auto policy that brings major changes to the heavily protected auto sector. It will significantly reduce import duties and eliminate all Regulatory Duties (RDs) and Additional Customs Duties (ACDs). In FY26, the government will lift import restrictions on used vehicles under five years old and replace them with environmental and safety standards.
The government aims to reduce protectionism, improve vehicle affordability, and align Pakistan’s trade policies with IMF guidelines through these changes.