Pakistan Likely to Permit 5-Year-Old Used Car Imports in Upcoming Budget

As Pakistan prepares to unveil its annual budget for the fiscal year 2025–26 on June 2, major changes to the automobile import policy are reportedly under consideration.

“In a bid to facilitate consumers, the government is considering allowing the import of 5-year-old used vehicles to align with auto sector reforms demanded by the International Monetary Fund (IMF).”

According to sources, the federal government is looking to relax import restrictions to offer more affordability and choice to car buyers. This move is part of broader reforms tied to IMF requirements aimed at improving competitiveness and transparency in Pakistan’s auto market.

“Other notable proposals include the reduction of CBU tariffs to below 10% and cutting overall auto duties to single digits over the next five years.”

The proposals also recommend a reduction in import duties by 5% to 30% on vehicles with engine capacities up to 1801cc, including smaller cars with engines up to 850cc. “The current rate of these duties is between 50% and 100% aside from the actual vehicle price, depending on engine size, according to sources cited by Samaa.”

These revisions come amid ongoing pressure from the IMF to reduce taxes related to imports. “The revision comes on the heels of consistent pressure from the IMF, which has urged Pakistan to lower import-related taxes to enhance transparency and competition in the auto sector.”

“Federal Board of Revenue (FBR) officials suggested that the proposed reductions would mainly benefit buyers of new vehicles, while the introduction of used car imports is being brought to widen buying options for consumers.”