In yet another blow to the already overburdened citizens, the government has announced that no accidental, damaged and low-quality used cars will be allowed into Pakistan.
As per details, the current government will also impose a heavy 40% tariff on commercial imports of used vehicles starting from September this year however official said that the tariff will result in protecting the local auto industry.
Meanwhile, the car prices will not provide any relief for the local consumers as the assemblers stated that high government taxation, ranging from 30% to as much as 61% of the retail price, already keeps vehicles expensive in the country.
The announcement was made during a joint meeting of the Senate Standing Committees on Finance and Industry yesterday. Joint Secretary for Trade Policy Mohammad Ashfaq told lawmakers that the government, under commitments made with the International Monetary Fund (IMF), will enforce additional tariff protection equivalent to 40% of the price of new cars.
Ashfaq said the government has yet to decide whether to continue with existing import schemes, such as transfer of residence, baggage, and gift, once commercial imports are formally allowed. At present, commercial imports are banned, and nearly one-fourth of market demand is met through vehicles brought in under these schemes, often mildly accidental but preferred by consumers over locally produced options.
Earlier, officials said token taxes have been charged under the West Pakistan Motor Vehicles Taxation Act, 1958, which has seen minimal updates up until now.
Previously, token rates were revised in 2019, limiting annual growth in receipts.
For FY2024–25, the Excise and Taxation Department reported Rs 4.29 billion in revenue and set a Rs 4.5 billion target under the new Finance Bill.
Furthermore, the Cabinet was told the framework lagged provincial systems and hampered efficient administration.
To address the issue, the Islamabad Capital Territory Administration has drafted the West Pakistan Motor Vehicles Taxation (Amendment) Act, 2025.
Also read: Suzuki Mehran: Timeless Budget Icon of Pakistan – History, Specs & Legacy
