Pakistan Allows Import of Five-Year-Old Vehicles with 40% Extra Duty

The federal government has officially permitted the commercial import of used cars up to five years old, but with a 40% additional Regulatory Duty (RD), according to a notification issued by the Ministry of Commerce. The decision—backed by the Economic Coordination Committee (ECC) and ratified by the federal cabinet—was announced through SRO 1895 (1)/2025, dated September 30, 2025. The new policy will remain effective until June 30, 2026, after which the government plans to phase out the duty gradually. Key Details of the Import Policy The 40% RD is in addition to the customs duties already applicable under SRO 1152(1)/2025, dated June 30, 2025. The duty applies to vehicles listed under PCT headings 8702, 8703, 8704, and 8711 of the Customs Act, 1969. Imports are permitted only for vehicles less than five years old. After June 30, 2026, the age limit may be lifted, and the duty will be reduced by 10% each year, reaching zero by FY 2029-30, in line with the Tariff Policy Board’s roadmap. Conditions for Importers According to the notification, the import of used vehicles will only be allowed if they comply with: Environmental standards Safety regulations Quality testing and certification issued by the Engineering Development Board (EDB), Ministry of Industries and Production The Commerce Ministry clarified that this clause will not override any other provisions of the Import Policy Order 2022 relating to the same vehicle categories. Background of the Decision On September 18, 2025, the ECC, chaired by Finance Minister Senator Muhammad Aurangzeb, approved the Ministry of Commerce’s summary regarding the scheme. The cabinet later endorsed the decision, paving the way for its formal implementation. This development marks a significant shift in Pakistan’s automobile import policy, aimed at creating a balance between consumer demand for affordable vehicles and the protection of local auto manufacturers.

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