ISLAMABAD – The federal government has slashed duty/tax on used imported cars from July 2025 as the budget for new fiscal year 2026 has come into effect.
The taxes have been reduced significantly on import of non-hybrid, hybrid and electric vehicles with different engine capacities, a move that would lead to a whooping cut in prices of cars, jeeps, vans and other vehicles.
This positive development comes as part of discussions with International Monetary Fund (IMF), which had recommended that Pakistan should open up commercial imports and reduce taxes on imported cars to make the market more competitive.
Furthermore, the government has also allowed the import of used vehicles up to 5 years old — a major shift from the previous limitation of three years. And in the long run, imports of cars up to 10 years old could also be allowed, giving buyers a broader range of affordable options.
New Duty/Tax on 1301-1500cc Vehicles from July 2025
The government has cut duty/tax on non-hybrid cars with engine capacity up to 3000cc and here we have gathered details of relaxation in taxes on vehicles of 1301 to 1500cc.
As per the reports the duty/tax on this category of used imported cars has been reduced by nine percent to 165%, compared to 174% in previous fiscal year. The prices of the imported cars will also drop accordingly in Pakistan.
On the other hand, the government has increased tax on locally assembled vehicles and motorcycles, a development that would jack up the prices of local cars in the country.
