The Federal Board of Revenue (FBR) is evaluating a proposal to allow the import of used vehicles up to five years old in the upcoming 2025-26 budget, as part of efforts to enhance competition in Pakistan’s automotive sector, Business Recorder reported.
Currently, the government permits the import of used cars up to three years old and SUVs up to five years under special schemes. The proposed policy would standardise the age limit across all vehicle categories, potentially expanding the scope for imports of older vehicles.
In the 2024-25 budget, the government imposed a 15% regulatory duty (RD) on imported used cars exceeding 1,300cc.Â
Additionally, the government is considering gradually phasing out regulatory duties and reducing tariffs on Completely Built-Up (CBU) vehicles to under 10%, with the broader objective of bringing the auto-sector tariffs to single digits within five years.
According to the news report, the FBR is taking measures to prevent the misuse of the import schemes for old and used vehicles. The personnel baggage scheme, transfer of residence, and gift scheme have reportedly been misused for importing older vehicles. Under the law, overseas Pakistanis are entitled to import vehicles under these schemes if they have not imported, gifted, or received a vehicle in the past two years.
The FBR has also clarified that customs will not charge an 18% sales tax on the auction of serviceable old and used vehicles if sales tax was previously paid at the time of local or import.Â
However, a sales tax will be levied on the auction of unserviceable or condemned vehicles, even if sales tax had already been paid on them earlier.
