Engineering Development Board plans to cut CBU vehicle import tariff to 15% by 2030

The Engineering Development Board (EDB), under the Ministry of Industries and Production, has announced a plan to reduce import tariffs on completely built-up (CBU) vehicles to 15% by 2030, Dawn reported. 

Currently, the import duty on CBU vehicles stands at 100%. 

According to Director General of the Pakistan Automotive Manufacturers Association (PAMA) Abdul Waheed Khan, the EDB had not previously disclosed the proposed duty reduction during earlier consultations.

The EDB recently held a detailed meeting with stakeholders from the auto sector to discuss future tariff proposals and asked the industry to submit their feedback by May 13. PAMA responded on May 14, marking the expected conclusion of the consultation process.

However, in an unexpected move, the EDB called a follow-up meeting on May 15 to communicate the plan to gradually lower the import tariff on CBU vehicles to 15 percent by 2030, catching the auto industry off guard.

In a related development, Pakistan has reached an agreement with the International Monetary Fund (IMF) to remove restrictions on the import of used vehicles, setting the stage for a gradual reduction in duties.

Under the new framework, import tariffs on used vehicles will initially be set 40% higher than those on new vehicles for the fiscal year 2026. This premium will be reduced by 10 percentage points annually, with the aim of reaching zero by 2030.

The agreement is part of the broader National Tariff Policy (NTP) for 2025-30, which the government plans to implement starting July 1, 2025.

The policy is designed to reduce trade barriers and simplify customs procedures, including the phased elimination of additional customs duties (ACDs) and an 80% reduction in regulatory duties (RDs). The NTP aims to gradually reduce the weighted average tariff from 10.6% in FY25 to 7.4% by FY30.