ISLAMABAD: The Tariff Policy Board (TPB), led by Commerce Minister Jam Kamal Khan, has approved the commercial import of five-year-old used vehicles with an additional duty of 40%.
The proposal will now be submitted to the Economic Coordination Committee (ECC) for final approval.
The decision comes despite objections from Pakistan’s auto industry, which warned that opening commercial imports could harm local manufacturing, jeopardize jobs, and raise concerns under FATF monitoring for money laundering and anti-terrorism financing.
The TPB, comprising representatives from Commerce, Industries and Production, Finance, and the Federal Board of Revenue, discussed the proposal in two consecutive meetings before giving approval.
The move aligns with Pakistan’s obligations under the International Monetary Fund’s Extended Fund Facility (EFF), which requires gradual reduction of tariffs on used vehicles.
Initially, all quantitative restrictions on commercial imports of vehicles under five years old will be removed starting FY26-Q1, subject to compliance with environmental and safety standards. The age restriction will be lifted entirely from July 2026 onwards.
Under the finalised TPB proposal, used vehicles will fall under PCT 8703, with imports allowed only if they meet standards notified by the Ministry of Industries and Production or relevant authorities.
The plan aims to harmonize Pakistan’s tariff policy with global trade commitments while addressing environmental and safety considerations.
Local automakers have repeatedly requested stricter regulations on used car imports, citing potential deindustrialization. Pakistan’s auto sector includes 13 major brands, such as Toyota, Honda, Suzuki, and Hyundai, supported by 1,200 auto parts manufacturers and employing around 1.5 million workers. The sector attracts roughly US$5 billion in investment and produces cars, trucks, buses, tractors, and motorcycles.
Industry representatives have warned that tariff reductions and commercial imports without age limits could undermine decades of investment and technology transfer.
