Budget 2024-25: Imported used cars to become more expensive

ISLAMABAD:  The government of Pakistan planned increasing regulatory duty on imported used cars in the upcoming budget 2024-25, in another bid to boost local automobiles.

It has been learnt that 30 percent rise in regulatory duty has been proposed for cars with engine capacities exceeding 1800cc, which could raise the duty uptp to 100 percent.

Additionally, 15 percent duty is proposed for used vehicles with engine capacities up to 1800 cc. Meanwhile, both new and old hybrid vehicles up to 1800 cc will remain duty-free.

The proposed increase comes in response to a 255 percent surge in car imports last year due to low regulatory duties.

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In a blow to local automakers, cars worth $210 million were imported, while Rs170 billion was spent on car parts for local assembly, with Rs600 million spent on foreign exchange to procure these parts from international markets.

Local auto industry invested about billions and contributed about Rs400bn in taxes in FY2022 alone, besides creating job opportunities.

As many as 3213 units were imported in February 2024 alone, against 396 units imported in the same month in the FY 2023, amounting to a staggering 713 per cent increase.

Amid surge in increasing imports of used cars into the country, their share has already increased to 30 per cent in the current Financial Year 23-24, up from 4 per cent in the entire Financial Year 22-23.