Pakistan is set to reduce its weighted average tariff from 10.6% to 9.5% in the upcoming 2026-27 budget, as part of a broader reform package tied to its agreement with the International Monetary Fund.
Under commitments made through the $7 billion Extended Fund Facility (EFF), authorities have agreed not to impose any new Regulatory Duty (RD) on imports.
Officials said the upcoming auto policy, likely to take effect from July 1, 2026, will outline a roadmap under the National Tariff Policy to further bring down tariffs to 7.4% by FY2030. For the auto sector specifically, the weighted average tariff is projected to decline to around 5.99%.
The policy also seeks to promote local manufacturing, increase localization of parts, and reduce vehicle prices.
Over the next five years, customs duties on completely built units (CBUs) are expected to be capped at 15%, while a simplified four-tier tariff structure of 0%, 5%, 10%, and 15% will replace the existing regime.
Moreover, the current 40% regulatory duty on used car imports is planned to be gradually phased out to zero in the coming years.
