Govt Approves Commercial Import of Five-Year-Old Used Cars With Extra Duty

The Tariff Policy Board, led by Commerce Minister Jam Kamal Khan, has approved the commercial import of five-year-old used vehicles with a 40% additional duty, Business Recorder reported, citing ministry sources. The decision will now be sent to the Economic Coordination Committee for final approval. The move comes under Pakistan’s commitments with the IMF, which require phasing out restrictions on used vehicle imports from fiscal 2025-26, beginning with cars less than five years old. By July 2026, the age cap will be removed, subject to safety and environmental standards. Local automakers, including Toyota, Honda, Suzuki, and Hyundai, strongly opposed the plan, warning it could dismantle the industry that employs 1.5 million people and represents $5 billion in investment. They argued that no country with domestic car manufacturing allows unrestricted used car imports. Industry leaders also raised concerns that the used car trade is under FATF scrutiny for risks of money laundering and terrorism financing. They urged the government to adopt regulatory frameworks similar to Australia and New Zealand, which enforce strict inspection and certification systems. Toyota’s Ali Asghar Jamali cautioned that tariff cuts and commercial used car imports could irreversibly damage the local industry and conflict with Pakistan’s “Make in Pakistan” agenda. Automakers have asked for protective measures, including banning used car imports and recalibrating taxes to discourage environmentally harmful vehicles.