The government has informed the Senate Standing Committee on Finance that it is allowing the commercial import of five-year-old vehicles from September in accordance with an International Monetary Fund (IMF) condition and an overall tariff strategy aimed at gradually phasing out overprotected sectors.
Briefing the Senate panel, chaired by Senator Saleem Mandviwalla, Finance Minister Muhammad Aurangzeb said the decision could enhance the competitiveness of the automobile sector as well as increasing access to imported vehicles for the middle class.
Under the current regime, commercial imports of vehicles are restricted. Overseas Pakistanis are permitted to import vehicles up to three years old under the Baggage Rules. Commerce ministry officials informed the meeting the decision would go into effect through a notification issued in the upcoming fiscal year. They said the imports would be subject to 40% regulatory duty in addition to existing duties and taxes on new vehicles.
They said the duty would be reduced in 10% increments annually from July 1, 2026, with its full elimination by July 1, 2029. There will be no restrictions on importing any type of used vehicles, including heavy bikes, from that point. The ministry said imports of used vehicles would continue to be subject to environmental and quality standards.
Similarly, the government plans to reduce duties and taxes on the import of new cars over the next five years, eventually capping at a maximum of 15%.