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The International Monetary Fund (IMF) has approved Pakistan’s proposal to allow the import of five-year-old vehicles, starting from September 2025, marking a significant shift in trade policy.
Ministry of Commerce officials confirmed the approval during a Senate Standing Committee briefing, noting that the IMF-supported change is designed to ease market demand and broaden consumer vehicle choices.
In the first phase, a 40 percent additional duty will apply on imported vehicles. This duty will be gradually reduced by 10 percent annually from fiscal year 2026–27 until fully removed.
Officials further announced the removal of the long-standing restriction on importing three-year-old vehicles. From FY27 onward, imports of vehicles up to seven years old will also be permitted.
For Pakistanis importing vehicles under the baggage scheme, the 40 percent additional duty will not apply – provided they fulfill the 700-day overseas stay condition to qualify for exemption.
The revised import policy is expected to boost competition in the auto sector, reduce vehicle prices, and expand options for middle-income consumers across Pakistan.
In other news, the Federal Board of Revenue (FBR) reported progress on customs reforms, revealing that duties on 35 percent of tariff lines have already been lowered to encourage trade growth.
New duty slabs of 5 percent, 10 percent, and 15 percent will replace the current 3 percent, 11 percent, and 16 percent, aiming to simplify Pakistan’s tariff structure and improve the business environment.
