In Pakistan The Federal Board of Revenue (FBR) has imposed a 40 percent regulatory duty on the commercial importation of used motor vehicles in Pakistan, effective from October 1, 2025. “The News” stated that the duty is imposed on top of the current customs fees charged on imported vehicles in accordance with the Import Policy Order 2022.
According to Business Recorder, the 40% regulatory duty is applied to vehicles brought into the country under Pakistan Customs Tariff (PCT) headings 8702, 8703, 8704 and 8711, imported under clauses (xvi) of the serial No. 10 in Appendix-C of the Import Policy Order 2022.
The duty will remain in force until June 30, 2026. From July 2026, the rate will reduce by 10 percentage points annually, with a complete phase-out scheduled by fiscal year 2029-30, reported The Express Tribune.
According to Dawn, only used vehicles less than five years old are eligible for commercial import until June 30, 2026. After this deadline, the age restriction may be removed, allowing more categories of vehicles to enter under the same import rules.
The Express Tribune stated that vehicles imported under the Import Policy Order 2022 must comply with environmental, safety, and quality standards defined by the Engineering Development Board (EDB) and the Ministry of Industries and Production. Imported cars will undergo testing and certification before being cleared.
The Pakistan Automotive Manufacturers Association (PAMA), quoted by Arab News, warned that the commercial import of used vehicles could affect local production and lead to job losses in the domestic automobile sector. Industry representatives argue that the policy may reduce demand for locally assembled cars.
At the same time, consumer groups suggest that the entry of imported vehicles could increase competition in the auto sector, possibly providing more choices in the market.
According to The News, the decision to impose the FBR regulatory duty on used vehicles is linked to Pakistan’s commitments under the IMF Extended Fund Facility (EFF). The government aims to gradually liberalize trade by lifting quantitative restrictions while controlling foreign exchange outflow.
The government also aims to balance the deficit in trade through the regulation of inflow of vehicles under the Import Policy Order 2022 to balance the foreign reserves.
The 40% regulatory duty on commercial import of used vehicles in Pakistan is a transitional measure. The staged cutoff strategy by 2030 will give domestic manufacturers enough time to adapt, importers and consumers to prepare to have an open market. The policy represents the Pakistan approach of balancing FBR regulatory responsibilities, IMF trade commitments, and the Import Policy Order 2022 to control the auto industry and foreign exchange reserves.
