ISLAMABAD: The federal government is considering a plan to gradually eliminate duties on used car imports as part of a new auto policy expected to be implemented from July 1, 2026.
According to sources, the draft of the new policy is currently being prepared and is under initial consultation with the International Monetary Fund (IMF).
The proposed policy outlines a phased reduction of additional customs duties and regulatory duties on imported vehicles over the next four to five years. By 2030, customs duty rates are also expected to be significantly reduced.
Under the plan, vehicles older than five years may eventually be allowed for import, although they will be required to meet strict safety and environmental standards and obtain relevant certification.
Sources said the government aims to finalize the draft within the current month, after which further consultations with the IMF will take place. The policy is expected to be presented to the federal cabinet for approval next month.
The initiative is part of broader efforts by the Ministry of Industries and Production (MoIP) to reduce overall tariffs and make the import regime more transparent and competitive.
From fiscal year 2027, additional duties are likely to be reduced by 10 percent annually. After FY2027, the import of vehicles up to seven years old may also be permitted.
In parallel, the government plans to introduce stronger safety measures for locally manufactured vehicles through the proposed Motor Vehicle Development Act, which will be presented in parliament for approval.
Earlier, IMF Managing Director Ms. Kristalina Georgieva appreciated Pakistan’s continued progress on economic reforms.
During her interaction with Finance Minister Muhammad Aurangzeb, on the sidelines of the IMF–World Bank Spring Meetings in Washington DC, she noted that Pakistan’s strong implementation of its reform programme has contributed to maintaining macroeconomic stability and building investor confidence.
