ISLAMABAD – Good news for auto lovers as Pakistan has made changes related to the ban on older vehicle imports, and now getting five-year-old cars will soon be possible after approval of Budget 2025.
The government planned allowing commercial import of vehicles up to five years old from September 2025 in what is said to be a major step in the broader trade reforms aimed at expanding consumer choices and boosting revenue through controlled imports.
The details were also shared by officials from Ministry of Commerce who shared policy change in Senate Standing Committee on Finance briefing. Earlier, around 40 percent additional duty will be imposed on imported vehicles under this scheme. The duty will be cut by ten percent each year, and completely removed in coming time.
The government also came up with plan to expand allowing imports of vehicles up to 7 years old, ending existing restriction on importing vehicles over 3 years old.
Pakistan earlier reached understanding with IMF to gradually lift restrictions on used car imports as part of a broader trade liberalization plan. Tariffs on used vehicles will be set 40% higher than those on new cars, with this premium decreasing by 10 percentage points annually until it is eliminated by 2030.
Imported Cars in Pakistan
These reforms will be part of the new National Tariff Policy (NTP) 2025–30, effective from July 1, 2025. The policy aims to lower trade barriers by phasing out Additional Customs Duties (ACDs), reducing Regulatory Duties (RDs) by 80%, and simplifying customs rules. This will reduce the average tariff rate from 10.6% to 7.4% by FY2030.
The heavily protected auto sector will also undergo major changes under a new auto policy from July 2026, with significant cuts to import duties and the removal of all RDs and ACDs. Import restrictions on used vehicles (under five years old) will be lifted in FY26, replaced by environmental and safety standards from July 2026.
With these changes, the goal is to reduce protectionism, enhance vehicle affordability, and align Pakistan’s trade policies with IMF rules.
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