ISLAMABAD – The federal government has decided to eliminate duties on imported vehicles as part of its upcoming five-year auto policy.
The Ministry of Industries and Production has prepared the draft policy, which will first seek approval from the International Monetary Fund (IMF) before any official announcement.
Reports said the proposed policy includes removal of import duties on vehicles, with customs duties gradually set at up to 15 percent over the next five years.
The plan also recommends stricter enforcement of safety standards and licensing requirements for vehicles.
The final draft of the policy is expected to be shared with the IMF by the end of this month. Once approved, it will be presented to the federal cabinet for formal adoption.
Pakistan is set to roll out a new five-year auto policy effective July 1, 2026, designed to strengthen local vehicle manufacturing, increase the localization of parts, and reduce vehicle prices.
Under the new policy, customs duties on finished vehicles will be capped at 15 percent over the next five years, with a simplified four-slab structure of 0%, 5%, 10%, and 15% replacing the current system.
Meanwhile, used vehicle imports will face a 40% regulatory duty for FY2026, which is expected to gradually decrease to zero in the following fiscal year.
Adviser to the Prime Minister on Industries, Haroon Akhtar Khan, told media that the policy has reached an advanced stage and will be submitted to the Prime Minister and federal cabinet before being made public. He added that consultations with stakeholders had been conducted to achieve a consensus, and a balancing approach would be applied if disagreements arise.
