Pakistan to allow import of older used cars from September under IMF-backed plan 

ISLAMABAD: Pakistan will start allowing the import of used vehicles up to five years old from September 2025 under a new policy approved by the International Monetary Fund (IMF), the Ministry of Commerce told the Senate Standing Committee on Finance during a briefing.

Officials said the policy aims to provide more affordable car options in the local market, which has been hit by rising prices and limited availability. Imported vehicles under this scheme will carry an additional 40 per cent duty at the start, but this extra levy will gradually drop by 10 percentage points each year beginning in fiscal year 2026-27.

The added duty will eventually be removed altogether, leaving only the standard import taxes in place. 

The government also plans to allow the import of vehicles up to seven years old from 2026-27, a major shift from the current three-year age limit. 

However, vehicles brought in under the baggage scheme, typically used by overseas Pakistanis bringing cars home, will be exempt from the 40 per cent additional duty. To qualify, the importer must have spent at least 700 days abroad. 

In a separate matter, the Senate committee rejected proposed amendments to the Public Finance Management Act (PFMA), which were put forward by the Ministry of Finance. Lawmakers asked the ministry to revise the draft after concerns were raised about financial transparency and control over surplus funds. 

Senator Anusha Rehman urged the government to bring all public and autonomous bodies under the audit jurisdiction of the Auditor General of Pakistan. Finance officials agreed to make changes in the wording of the draft law, replacing the term “business entities” with “public entities”. 

During the session, ministry officials also revealed that the Port Qasim Authority had refused to transfer surplus funds as requested, and the matter had been referred to another division that had yet to respond. 

Meanwhile, the Federal Board of Revenue (FBR) shared updates on customs reforms. Officials said duties had already been reduced on 35 per cent of tariff lines, and new simplified duty slabs of 5, 10 and 15 per cent would replace the existing 3, 11 and 16 per cent structure. 

They added that duties on another 916 tariff lines would be brought down to zero, taking the total number of zero-rated items to 3,117. 

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