The government has decided to allow the commercial import of five-year-old vehicles starting from the next fiscal year.
During a briefing to the Senate Standing Committee on Finance regarding amendments to the customs tariff, Federal Board of Revenue (FBR) officials confirmed the decision. The official said that a 40 percent additional customs duty will be imposed on these imported vehicles.
According to officials, the International Monetary Fund (IMF) has set a condition to reduce import duties on vehicles to zero over the next four years. Duties will be reduced by 10 percent annually, regardless of whether one or 200 vehicles are imported—each will still incur the 40 percent additional duty.
Officials from the Ministry of Commerce noted that the import of older vehicles will begin in September 2025. In the future, the import of vehicles up to six and seven years old will also be permitted. Under the new auto policy, duties on imported vehicles will be further reduced, with tariffs expected to drop substantially.
The committee recommended allowing the import of five-year-old vehicles under both the baggage scheme and commercial channels. However, Commerce Ministry officials clarified that a 40 percent additional tax would also apply under the baggage scheme. Under the gift scheme, overseas Pakistanis may gift one vehicle to a family member.
FBR officials also reported that the tax on vehicles up to 850cc has been increased from 12.5 percent to 18 percent.
Moreover, the committee recommended abolishing the duty on the import of grandparent chickens. The committee chairman noted that the poultry sector has requested duty-free import permission. FBR officials responded that this category currently generates only PKR 30 million in revenue.
Finance Minister Muhammad Aurangzeb informed the committee that tariffs are a fundamental issue and require broad-based support. He also noted that under the baggage scheme, only vehicles up to three years old are currently permitted.
