ISLAMABAD: Pakistan has announced a major shift in its vehicle import policy, unveiling a roadmap to liberalise the import of used vehicles over the next four years.
Finance Minister Muhammad Aurangzeb informed a parliamentary committee that restrictions on commercial imports of used vehicles up to five years old will be lifted starting September 2025.
This move aligns with International Monetary Fund (IMF) conditions and forms part of a broader tariff strategy to phase out protection on overregulated sectors gradually.
Phased Removal of Age Restrictions and Duties
From July 1, 2026, the age limit on importing used vehicles will be completely removed, allowing unrestricted commercial imports regardless of vehicle age.
However, despite lifting age limits, stringent quality and environmental standards will remain mandatory for all imported vehicles.
Currently, only vehicles up to three years old can be imported under the Baggage Rules by overseas Pakistanis, with some exceptions up to five years for non-car vehicles.
The government will apply a 40 percent regulatory duty on used vehicle imports initially, which will reduce gradually each year—down to zero by July 2029.
Impact on Auto Sector and Customs Reforms
This policy shift is expected to improve competitiveness in Pakistan’s auto sector and increase access to affordable imported vehicles, particularly benefiting the middle class.
The finance ministry also reported ongoing customs reforms, including reduced duties on 35 percent of tariff lines and proposed new duty slabs of 5, 10, and 15 percent.
Additionally, duties on 916 tariff lines will be eliminated, raising the total number of zero-rated lines to 3,117, further easing import regulations and encouraging trade.Vehicles, Imports, Liberalisation
