Govt. Approves Import of 5-Year-Old Cars Under New Policy

Jawad

20 Jun 2025

115

Govt. Approves Import of 5-Year-Old Cars Under New Policy

In a major shift in the Pakistan car import policy, the government has approved the import of old cars up to five years old for commercial use. The decision, which will come into effect from September 2025, was revealed during a recent session of the Senate Standing Committee on Finance. Officials from the Federal Board of Revenue (FBR) outlined this change as part of broader economic and customs reforms.

This update is seen as a strategic step to boost market competition, generate more revenue, and meet international trade expectations.

Key Updates in Car Import Policy:

Previously, used car import Pakistan rules only allowed vehicles up to three years old under the baggage scheme. With the new regulations, the 5-year-old car import limit marks a significant extension.

Major highlights include:

Used car import rules now allow commercial import of vehicles up to 5 years old from September 2025.
A fixed 40% additional customs duty will apply to each imported car.
Consumers will enjoy more choices while the duty aims to protect the local industry.

These changes are expected to attract interest from both importers and car buyers, especially considering the continued rise in local auto prices.

Tariff Reforms Linked to IMF Conditions:

This update in car import new rules aligns with Pakistan’s commitment to the International Monetary Fund (IMF). The IMF has advised Pakistan to gradually reduce vehicle import duties over the next four years.

Planned reductions:

A yearly 10% cut in import duties, aiming to reach 0% by 2029.
Greater competition expected in the market, pushing local manufacturers to improve quality and pricing.

There is also a possibility that the old car import policy could later expand to include six- or seven-year-old cars, depending on the success of the initial implementation.

Taxation Impact on Small Vehicles

While the new Pakistan vehicle import news brings relief to some buyers, cost concerns remain. The government has increased the sales tax on vehicles up to 850cc from 12.5% to 18%, affecting affordability for lower-income consumers.

The Senate committee has recommended that the 5-year-old car import rule apply to both commercial and baggage schemes. Officials confirmed that even vehicles brought in under the baggage option would be subject to the same 40% duty.

The gift scheme, which allows overseas Pakistanis to send vehicles to relatives, will continue unchanged.

Government’s Vision for the Auto Sector

Finance Minister Muhammad Aurangzeb emphasized the importance of a stable and clear car import 2025 Pakistan policy. He noted that inconsistent rules in the past had discouraged investment and trade growth. The new policy aims to bring predictability and support long-term development.

Whether the government car import update ultimately benefits everyday consumers or mainly favors commercial importers will become clearer as the reforms roll out in phases. The balance between consumer benefit, industry protection, and revenue generation will define the policy’s success.

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