FBR Imposes 40% Duty on Commercial Imports of Used Vehicles

The Federal Board of Revenue (FBR) has imposed a 40 percent regulatory duty on commercial imports of old and used vehicles. Under S.R.O. 1898(I)/2025, issued on Thursday, this 40% levy is in addition to the regulatory duty already imposed under S.R.O. 1152(I)/2025. The notification cites powers under sub-section (3) of section 18 of the Customs Act, 1969. This move is part of a broader change in import policy where the government will now permit commercial import of five-year-old used vehicles, but with a 40% additional tariff in FY26. It applies to used vehicles falling under PCT headings 8702, 8703, 8704, and 8711, imported under clause (xvi) of Appendix C in the Import Policy Order 2022. The duty will be levied on top of the existing regulatory duty from the earlier SRO (1152) dated June 30, 2025. The government plans to reduce this extra 40% duty by 10 percentage points each year, phasing it out fully by 2029-30. The move aligns with Pakistan’s commitments under the IMF program to liberalize tariffs gradually and permit used vehicle imports under controlled terms.