The Pakistani government has recently introduced a 40% additional duty on used car imports, changing the dynamics of the automobile market. The move is aimed at controlling foreign exchange, aligning with International Monetary Fund (IMF) standards, and protecting the local car manufacturing sector. While policymakers defend the decision as necessary for economic stability, critics argue that it limits consumer choice in the automotive sector and creates affordability issues for ordinary citizens. Some people import cars at home through social media, and some people get frustrated due to a lack of followers on their social accounts, but you don’t need to worry at all. We recommend purchasing Pakistani followers from this website. Importers, overseas Pakistanis, and car traders are directly affected as the cost of ownership increases significantly. This guide explains the new duty, its background, implications, and how it shapes Pakistan’s auto industry.
Key Decision and the Government’s Next Steps
The decision was finalized by the Tariff Policy Board (TPB) in consultation with the Economic Coordination Committee (ECC). These institutions play a critical role in shaping the import restrictions and duty structure in the country. Officials argue that without strict rules, Pakistan would lose valuable foreign reserves, while the domestic industry would suffer.
Looking ahead, the government has indicated that it may review the policy in 2025. Some relief could be offered for smaller engine vehicles or for the import of five-year-old vehicles under certain schemes. However, these decisions will depend on external pressures from the IMF and the Financial Action Task Force (FATF) concerning trade regulations.
Terms and Conditions of Import Policy in Pakistan
The used car import policy in Pakistan is detailed and restrictive. Only certain categories of cars can be imported, and strict paperwork is required. The importer must show proof of foreign income, purchase invoices, and valid shipping documents. Without these, vehicles are not cleared at ports.
The policy also requires cars to meet vehicle safety regulations and environmental compliance standards. Cars that fail these checks are often seized or fined. Moreover, the age limit for imported cars, especially five-year-old vehicles, is strictly enforced.
Special Schemes for Overseas Pakistanis and Their Challenges
Overseas Pakistanis are given certain privileges under special schemes. They can import cars under the gift, baggage, or transfer of residence rules. This provides some relief to expatriates who want to support families back home.
Yet, the 40% additional duty remains a big hurdle. Many overseas Pakistanis have complained that these costs are too high, making imports almost impossible. Additionally, delays at customs and a lack of transparency often discourage them from using these schemes.
Industry Pushback and Market Reactions
The local car manufacturing sector has welcomed the decision, claiming that it protects jobs and encourages investment. They argue that unrestricted imports could damage the industry. On the other hand, car dealerships and traders are critical of the decision. They believe that consumer choice in the automobile sector is now limited, leading to frustration among buyers.
Market analysts also point out that prices of locally manufactured cars have continued to rise, even with the import restrictions. This shows that protecting local manufacturers does not necessarily benefit consumers in terms of affordability.
Financial Impact – Prices, Affordability, and Taxation Issues
The 40% additional duty has caused a sharp rise in car prices across the country. A mid-sized imported car that cost PKR 2 million before the duty may now cost over PKR 2.8 million. This makes it harder for the middle class to own quality vehicles.
| Car Type | Price Before Duty | Price After 40% Duty |
| 1000cc Sedan | PKR 2,000,000 | PKR 2,800,000 |
| 1300cc Hatchback | PKR 2,400,000 | PKR 3,360,000 |
| 1500cc SUV | PKR 3,200,000 | PKR 4,480,000 |
The additional taxation also creates revenue for the state, but critics argue that it hurts long-term growth and affordability.
Historical Context – Previous Import Duties and Policy Shifts
Historically, Pakistan has seen many changes in its import restrictions and duty structure. In the early 2000s, duties were lower, and automobile market liberalization was encouraged to meet rising demand. Later, duties were increased to protect local industries.
This back-and-forth policy has created uncertainty in the market. Many buyers hesitate to invest in imported cars due to sudden policy shifts, while dealers face losses whenever duties change unexpectedly.
Comparison with Regional Car Import Policies
When compared to other countries, Pakistan’s import duties are among the highest. In India, car import duties are also high, but buyers benefit from better local manufacturing options. In Bangladesh, the duty structure is more flexible, especially for smaller cars. Gulf countries, on the other hand, have more relaxed rules, making car imports cheaper.
This comparison shows that Pakistan is struggling to balance between protecting the local car manufacturing sector and providing affordable choices to consumers.
Broader Implications for Pakistan’s Auto Industry and Economy
The current duty has both positive and negative implications. On one hand, it protects the Pakistan auto industry by limiting competition from foreign cars. On the other hand, it reduces consumer choice in the automobile sector, discourages foreign investors, and increases prices.
Economists also warn that these policies may slow down innovation and reduce competition. In the long run, this could harm the economy by keeping technology outdated and prices artificially high.
Conclusion – Future of Used Car Imports in Pakistan
The used car imports to Pakistan 40% duty will remain a hot topic in 2025. While it supports the local car manufacturing sector, it creates problems for consumers and overseas Pakistanis. The decision is tied to broader issues like FATF concerns, IMF benchmarks, and Pakistan’s fragile economy.
The future of the used car imports policy will depend on how the government balances affordability, industry protection, and international commitments. For now, buyers must prepare for higher costs while waiting for possible reforms that may bring relief in the coming years.
FAQs
1. What is the 40% duty?
It’s the customs duty on the car’s value. Total taxes can go beyond 40% after adding sales tax, income tax, and other charges.
2. Who can import used cars to Pakistan?
Only overseas Pakistanis under the Baggage, Gift, or Transfer of Residence schemes.
3. What’s the age limit for used cars?
SUVs and 4x4s must not be older than 5 years.
4. What documents are needed?
Required documents include CNIC, passport, proof of stay abroad, vehicle papers, and Bill of Lading.
5. Are there other taxes?
Yes – Sales Tax, Income Tax, Regulatory Duty, and FED may apply based on engine size and model.