Pakistan to Impose 40% Tariff on Used Vehicle Imports Amidst Industry Debate and IMF Policy Influence
August 26, 2025
Decision on whether existing non-commercial import schemes will continue after commercial imports resume has not been made, though current schemes account for roughly a quarter of demand.
Pakistan will levy a 40% tariff on commercial imports of used vehicles starting next month, but will allow imports of used cars up to five years old from September and plans to remove age/quality restrictions by next July.
Under the IMF program, overall tariffs are set to fall in the next fiscal year with the average tariff dropping to about 15.7%, including cuts to customs duty, additional customs duty, and regulatory duty.
Duties on auto sector products under the Auto Policy, currently at 35%, are slated for removal beginning July 1, 2026.
Industry sentiment in committee sessions flagged high local prices and perceived low quality of domestically produced vehicles, while acknowledging the IMF-driven policy framework.
Pak-Suzuki and Indus Motors representatives argued that local production has become too costly, making imports more practical and questioning the viability of domestic manufacturing.
Local industry bodies, including PAMA and PAAPAM, opposed liberalisation, warning that lower duties on used cars could undermine domestic manufacturers.
Senate committee members questioned IMF influence on consumer policies and debated whether reduced protection would spur efficiency and safety improvements.
Industry input emphasizes that even with liberalisation, prices may not fall due to high taxes on vehicles, with tax components ranging from about 30% to 61% depending on the model.
Summary based on 9 sources
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Sources

ProPakistani • Aug 26, 2025
Govt to Impose 40% Tariff on Used Cars
Profit by Pakistan Today • Aug 26, 2025
Govt to ban import of accidental cars, impose 40% tariff on used vehicles
Daily Pakistan English News • Aug 26, 2025
Big Tariff on Imported Cars pushes prices beyond reach in Pakistan
TechJuice • Aug 26, 2025
Govt Announces 40% Tariff on Used Car Imports