The Federal Board of Revenue (FBR) has announced a 40% Regulatory Duty (RD) on the commercial import of used vehicles, effective immediately.
The duty applies to vehicles classified under PCT headings 8702, 8703, 8704, and 8711, as specified in the Customs Act of 1969 and clause (xvi) of Serial No. 10 in the Import Policy Order of 2022. This new levy is in addition to the existing duties established by S.R.O. 1152(1)/2025, which take effect on June 30, 2025.
On September 30, the Ministry of Commerce issued S.R.O. 1895(1)/2025, which permits the commercial import of vehicles up to five years old. This policy was approved by the Economic Coordination Committee (ECC), chaired by Finance Minister Muhammad Aurangzeb, on September 18, and was subsequently ratified by the federal cabinet. Under this policy, a 40% duty will remain in effect until June 30, 2026. Following that date, the duty will decrease by 10 percentage points each year, ultimately reaching zero by 2029-30, in line with the Tariff Policy Board’s plan.
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Additionally, imports must meet environmental, safety, and quality standards set by the Engineering Development Board (EDB) under the Ministry of Industries and Production. The policy ensures compliance without overriding other provisions in the Import Policy Order, 2022.
The new duty aims to regulate the influx of used vehicles while striking a balance between economic and environmental goals. For instance, it encourages quality control through EDB standards. However, this may increase costs for importers and consumers, potentially impacting Pakistan’s automotive market. The gradual reduction plan signals long-term openness to trade, potentially easing concerns by 2030.
