ISLAMABAD – The federal government has decided to gradually phase out additional customs and regulatory duties on imported vehicles as part of preparations for a new auto sector policy to take effect from July 1, 2026.
Under the new policy, additional duties will be reduced by 10 percent each year starting in fiscal year 2027, with a complete removal of these duties within four years. Customs duty rates will also be gradually lowered by 2030.
The policy introduces relaxed rules for importing older vehicles, allowing cars up to seven years old after fiscal year 2027, provided they meet strict safety and environmental standards.
To ensure road safety, locally produced vehicles will adhere to global safety standards under a new law to be approved by Parliament.
The draft policy is being reviewed in consultation with the International Monetary Fund (IMF) and will be presented to the federal cabinet next month.
Officials said the reforms aim to boost competition, stabilize car prices, and align Pakistan’s tariff structure with international standards.
