Business Desk 
May 16, 2025
Pakistan will likely modify its car import policy in the coming federal budget 2025-26 by permitting the import of used cars up to five years old.
Currently, only three-year-old cars and five-year-old SUVs can be imported into the country under certain schemes.
If approved, the step could make more affordable used cars available for Pakistani customers, particularly in a market where local car prices are still high.
Overseas Pakistanis are also likely to gain from the policy change. According to the current Import Policy Order (IPO) 2022, only overseas Pakistanis who donnot have availed themselves of any car import scheme during the last two years can import a car by personal baggage, transfer of residence, or gift schemes.
The schemes had earlier been misused and were therefore reinforced by the government.
Apart from easing the age restriction on imported automobiles, the government is also considering cutting tariffs on Completely Built-Up (CBU) vehicles.
Moreover, there are discussions of lowering import duties to below 10% with the goal of taking all auto-related tariffs into single digits in five years' time. This can help lower overall automobile prices in the long term.
Furthermore, used car purchasers will also benefit from relief on taxation. The Federal Board of Revenue (FBR) has explained that cars auctioned off, if already taxed in the process of import or local procurement, will not be subject to an additional 18% sales tax, except if they are not serviceable.
