Overview:
Pakistan is taking significant steps in automotive industry. The government of Pakistan has decides to give relaxation in import taxes of cars. The restrictions are relaxed and Government of Pakistan has approved import of 5 years old cars. This is a step forward from the previous policy which permitted the imports up to 3 years old cars.
This change is a part of broader economic reform agenda linked to IMF commintments. It aims to liberalize trade, enhance customer’s choice and to reduce cars prices. By expanding the age limit we can hope ease in burden on car buyers facing high prices in local markets.
Changings After Vehicle’s Import
The key change is that the government will now allow the import of used cars up to 5 years old, instead of the previous 3-year limit for passenger cars. This new policy will apply to all categories of vehicles, including sedans, hatchbacks, and SUVs.
Additionally, imported used cars will be subject to a 40% premium tax, which will gradually decrease by 10% each year until it reaches zero by 2030. This change is part of a wider tariff and trade reform plan linked to Pakistan’s commitments with the IMF, aimed at boosting competition, affordability and government revenue.
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Highlights for Vehicles Import
- Policy Change: The age limit for used car imports extended from 3 years to 5 years.
- Purpose: To lower car prices and provide more options to buyers amid high inflation and rising new car costs.
- Vehicle Types: Applies mainly to passenger vehicles under existing schemes (e.g., transfer of residence, gift, or baggage schemes).
- Impact on Market: Likely to create pressure on local car assemblers to revise pricing and improve features.
- Custom Duty & Taxes: Importers will still be subject to existing duties, which vary by engine size and vehicle category.
- Environmental Concerns: The government may issue additional regulations to ensure imported vehicles meet emission standards.
Requirements:
- Valid proof of ownership abroad.
- Vehicle must not be over 5 years old from the manufacturing date.
- Compliance with Pakistan’s safety and emission standards.
Purpose Of Approval Of Vehicles Import
The purpose behind the government’s approval to allow the import of 5-year-old used cars is to provide affordable vehicle options to the public. Especially for middle and lower-income groups who are unable to purchase brand-new vehicles due to high prices. This policy aims to increase competition in the local automobile market and to encourage local manufacturers to improve their pricing and quality standards.
By allowing older imported cars, the government also seeks to diversify the range of available vehicles, offering models and features that are not commonly found in locally assembled options. Additionally, the move is intended to counteract the impact of inflation and currency depreciation, which have significantly raised car prices in Pakistan. It is also expected to reduce the monopoly of a few dominant car assemblers, ultimately benefiting consumers through better quality, more choices, and fairer prices.
