Pakistan to Impose 40% Tariff on Used Vehicle Imports Amidst Industry Debate and IMF Policy Influence

August 26, 2025
Pakistan to Impose 40% Tariff on Used Vehicle Imports Amidst Industry Debate and IMF Policy Influence
  • 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

Govt to Impose 40% Tariff on Used Cars

ProPakistani • Aug 26, 2025

Govt to Impose 40% Tariff on Used Cars


Big Tariff on Imported Cars pushes prices beyond reach in Pakistan

Daily Pakistan English News • Aug 26, 2025

Big Tariff on Imported Cars pushes prices beyond reach in Pakistan

Govt Announces 40% Tariff on Used Car Imports

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