Pakistan to Allow 5-Year-Old Car Imports from 2025 Under New IMF-Backed Policy

In a transformative decision for Pakistan’s automotive industry, the government has announced that five-year-old used vehicles will be allowed for import starting September 2025. This policy, recently approved by the International Monetary Fund (IMF), marks a major shift in the country’s trade and fiscal strategy.

Key Highlights of the New Car Import Policy

• Effective Date: September 2025
• Eligibility: Cars up to 5 years old (extended to 7 years by FY 2027)
• Initial Duty: 40% additional duty on imported cars
• Phased Reduction: Duty reduced by 10% annually starting FY 2026-27
• Exemptions: Baggage scheme imports exempt from the 40% duty (with a 700-day overseas stay condition)

This move replaces the current restriction, which only allows the import of vehicles up to three years old. It aims to increase consumer choice, provide access to affordable vehicles, and boost competition in the local auto market.

Broader Economic Reforms Underway

This car import policy is part of a larger economic reform package tied to IMF oversight. During the same Senate Finance Committee session, updates were provided on fiscal legislation and customs reforms.

Key Developments:

• Public Finance Management Act (PFMA): Proposed amendments were rejected. Lawmakers called for stronger institutional checks and audits of all public entities by the Auditor General of Pakistan.
• Port Qasim Authority: Refused to transfer surplus funds due to pending inter-agency coordination.

Major Customs Duty Reforms by FBR

To further simplify trade, the Federal Board of Revenue (FBR) has revamped its customs duty structure:

• Revised Slabs: New rates of 5%, 10%, and 15% replace the old 3%, 11%, and 16% slabs
• Zero-Rated Items: 916 new tariff lines added, bringing the total to 3,117 items with zero customs duty
• Tariff Coverage: Duty structure revised on 35% of total tariff lines

These reforms are expected to enhance trade efficiency, promote investment in key sectors, and support Pakistan’s broader fiscal goals.

A New Era for Pakistan’s Auto Market

The Pakistan five-year-old car import policy 2025 signals a new direction for the country’s automotive and trade sectors. Backed by the IMF and supported by broader customs and fiscal reforms, this move promises to create a more open, consumer-friendly car market while supporting economic recovery and competitiveness.

Disclaimer:
The information provided in this article is for general informational purposes only and is based on publicly available data and official statements as of the publication date. While every effort has been made to ensure accuracy, policies, regulations, and government decisions may change over time. Readers are advised to consult official government sources or legal advisors for the most current and specific guidance regarding vehicle imports, customs duties, or financial regulations in Pakistan.

Afsheen Gohar

Afsheen Gohar is a seasoned writer with a wealth of experience in crafting authentic and well-researched articles. Her dedication to delivering high-quality content is evident in her work, where she combines a passion for storytelling with a commitment to accuracy and depth. Afsheen’s writing reflects her ability to engage readers with compelling narratives while providing valuable insights on a diverse range of topics.