The federal government is working on a new auto policy that could bring major changes to used car imports in Pakistan. The proposal, which is still in draft stage, is expected to be implemented from July 1, 2026, after completion of consultations and approvals.
Policy Development and IMF Consultations
According to official sources, the draft policy is currently being prepared and is under early discussion with the International Monetary Fund (IMF). The aim is to align the auto sector with broader economic reforms while improving transparency in import regulations.
Step by Step Reduction in Duties
The proposed plan includes a gradual reduction of additional customs duties and regulatory duties on imported vehicles over the next four to five years. If implemented, this phased approach could significantly lower overall import costs by 2030.
Possible Change in Vehicle Import Rules
One of the key proposals under consideration is allowing the import of vehicles older than five years. However, these vehicles would still need to meet strict safety and environmental standards and pass required certification checks before being cleared for import.
Annual Duty Reduction Strategy
Sources suggest that from fiscal year 2027, import-related additional duties may be reduced by around 10 percent every year. After this phase, the import of vehicles up to seven years old could also be permitted, depending on policy decisions.
Broader Reform and Industrial Upgrades
The policy is part of a wider effort by the Ministry of Industries and Production (MoIP) to make the auto sector more competitive and transparent. Alongside import reforms, the government is also working on stricter safety standards for locally manufactured vehicles through a proposed Motor Vehicle Development Act.
IMF View on Pakistan Reforms
The International Monetary Fund has also acknowledged Pakistan’s progress on economic reforms. IMF Managing Director Kristalina Georgieva recently appreciated the country’s efforts, noting that these steps are helping improve macroeconomic stability and strengthen investor confidence.
