The federal government is considering a major shift in its auto policy by gradually reducing duties on used car imports, with the new framework expected to take effect from July 1, 2026.
According to media reports, the draft policy is currently under preparation and initial consultation with the International Monetary Fund (IMF), as part of broader economic reform commitments.
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Under the proposal, additional customs and regulatory duties on imported vehicles will be reduced in phases over the next four to five years, with significant cuts expected by 2030.
Proposed Changes in Auto Import Policy
Officials say vehicles older than five years may eventually be allowed for import, subject to strict safety and environmental standards along with mandatory certification requirements, as reported by local media.
Media reports indicated that the government aims to finalize the draft policy within the current month, followed by further consultations before presenting it to the federal cabinet for approval next month.
The initiative is being led by the Ministry of Industries and Production (MoIP) to make the import regime more transparent, competitive, and aligned with international practices.
Gradual Duty Reduction Plan
From fiscal year 2027, additional duties are expected to decrease around 10 percent annually, signaling a long-term transition toward a more open auto market.
After FY2027, the policy may also allow the import of vehicles up to seven years old, expanding options for consumers while increasing competition in the local market, as per media reports.
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The report further stated that the government plans to introduce stricter safety regulations for locally manufactured vehicles through the proposed Motor Vehicle Development Act, which will be presented in parliament for approval.
IMF Engagement and Economic Context
The policy discussions are taking place alongside ongoing engagement with the IMF, reflecting Pakistan’s broader economic reform agenda.
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Recently, IMF Managing Director Kristalina Georgieva appreciated Pakistan’s progress in implementing reforms during a meeting with Finance Minister Muhammad Aurangzeb at the IMF – World Bank Spring Meetings in Washington DC.
She noted that consistent reform efforts have helped maintain macroeconomic stability and improve investor confidence in the country.
Source: ARY News
