ISLAMABAD: The federal government of Pakistan has approved a 40% additional regulatory duty on the commercial import of used cars for cars up to 5-years-old as of 1st of October 2025.
The Federal Board of Revenue, has published the official notice related to the implementation of the new rules.
The new additional regulatory duty, the FBR pointed out, is in addition to the existing import duties and taxes, valid until the 30th of June 2026. Following that period, the additional duty will decline by 10% every year until the first of June 2029, when the additional duty rates are entirely eliminated.
The overall objective will be stabilizing revenue in the short term, with the hope of providing long-term relief to the automotive sector and expanding consumer choice.
In addition, the Ministry of Commerce has amended the Import Policy Order, 2022, and only permits the commercial importing of a car or truck up to five years old until June 2026.
Government officials said that all imported cars must follow environmentally and safety regulated standards to ensure improved road safety and lower air quality.
The policy was initially cleared by the Economic Coordination Committee (ECC) on September 24, based on the growing cost of a new vehicle on middle-class consumers. Officials noted that the revised policy aims to offer more affordable options to buyers while still protecting the interests of the local auto industry.
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However, due to the imposition of the new duty, prices of imported used vehicles are expected to rise in the short term. Analysts expect prices may begin to drop once the phased duty reduction begins in 2026.
