The government of Pakistan is preparing a new auto policy that proposes gradually eliminating duties on used car imports, with implementation expected to begin from July 1, 2026.
Officials said the draft policy is under preparation and currently undergoing initial consultations with the IMF regarding proposed tariff reductions and import regulations framework.
The plan outlines a phased reduction in additional customs duties and regulatory duties on imported vehicles over four to five years, with broader tariff cuts targeted by 2030.
Under the proposal, vehicles older than five years may be allowed for import, subject to compliance with strict safety and environmental standards and certification requirements.
Government sources indicated the draft is expected to be finalised within the current month before further consultations with the International Monetary Fund are conducted.
The policy will then be presented to the federal cabinet for approval next month as part of efforts to implement a revised and competitive auto framework.
From fiscal year 2027, additional duties are expected to decrease by 10 percent annually, while imports of vehicles up to seven years old may be permitted.
The Ministry of Industries and Production is leading the initiative to reduce tariffs and improve transparency within the vehicle import regime under the new policy.
Separately, the government plans to introduce stricter safety requirements for locally manufactured vehicles through the proposed Motor Vehicle Development Act to be presented in parliament.
IMF Managing Director Kristalina Georgieva acknowledged Pakistan’s progress on economic reforms during discussions with Finance Minister Muhammad Aurangzeb in Washington DC recently.
