As car prices continue to soar, the federal government is considering a substantial reduction in taxes on imported vehicles to make them more accessible to consumers.
According to official sources, the Federal Board of Revenue (FBR) has proposed cutting customs duty by 5% to 30% on brand-new imported cars. This tax relief would cover a variety of vehicles, ranging from compact 850cc models to larger 1801cc options. Currently, imported cars face steep taxation, with duties ranging between 50% and 100%, making them costly for buyers.
The initiative aligns with ongoing discussions with the International Monetary Fund (IMF), which has recommended easing import restrictions and lowering taxes on foreign vehicles to enhance market competition.
Moreover, the government is reassessing its policy on used cars, with a potential shift toward allowing the import of pre-owned vehicles up to 5 years old—a major departure from the current limits. Over time, the policy might extend to vehicles up to 10 years old, expanding affordable choices for consumers.
These proposals are part of a broader strategy to combat rising car prices, driven by high taxation, rupee depreciation, and stringent import regulations.
The upcoming budget is also expected to reinforce the government’s push for electric vehicles (EVs) under the 2019 National Electric Vehicle Policy, potentially introducing tax exemptions and incentives for both imports and local assembly of EVs and their components.
