Used car traders get much anticipated good news from govt

ISLAMABAD: In a significant shift in Pakistan’s automobile import policy, the federal government is considering lifting the restriction on the import of used vehicles that are up to five years old, a move expected to benefit traders and consumers alike.

The development was revealed by Federal Secretary Commerce Jawad Paul during a meeting of the National Assembly Standing Committee on Finance and Revenue on Saturday.

The committee, chaired by Syed Naveed Qamar, continued its clause-by-clause review of the Finance Bill 2026 during its meeting at Parliament House in Islamabad.

Briefing the committee on the National Tariff Policy, the commerce secretary said the government plans to gradually reduce import duties and rationalize the tariff structure to enhance competition and improve consumer welfare.

According to the briefing, the government has proposed eliminating Additional Customs Duty (ACD) over a five-year period. Regulatory duties will also be gradually reduced and eventually brought down to zero.

Under the proposed reforms, Jawad Paul said, customs duties will be capped at a maximum of 15 percent within five years, while the maximum regulatory duty rate will be limited to 20 percent. Lower regulatory duty slabs of 1 percent, 2 percent, and 2.5 percent are also proposed to be abolished.

The secretary said the National Tariff Policy aims to increase market competition, streamline tariffs, and fully digitize the national tariff system. He added that the Fifth Schedule of the tariff regime would be comprehensively rationalized.

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As part of the proposed changes, the regulatory duty on imported used vehicles is expected to be reduced from 40 percent to 30 percent. The government is also considering removing the existing restriction on the import of five-year-old used vehicles.

“The objective of the move is to promote consumer welfare, expand market access, and encourage competition in the automobile sector”, the commerce secretary said.

Committee Chairman Naveed Qamar observed that Pakistan’s auto industry has historically enjoyed a high level of protection, noting that increased imports could create greater competition in the market and help lower vehicle prices for consumers.

The commerce secretary further informed the committee that 62 safety standards currently applicable to imported vehicles would also be enforced on locally manufactured vehicles.

He also highlighted past misuse of the personal baggage scheme, stating that names and passports of individuals who had spent at least 180 days abroad were often used improperly to facilitate vehicle imports.

The proposed measures are part of broader tariff reforms aimed at improving market efficiency, enhancing consumer choice, and aligning Pakistan’s trade policies with international best practices, Jawad Paul added.