TPB Approves 5-Year Used Vehicle Imports

The Tariff Policy Board (TPB), chaired by Commerce Minister Jam Kamal Khan, has endorsed the commercial import of five-year-old used vehicles with a 40% additional duty, according to Business Recorder. This proposal now awaits final approval from the Economic Coordination Committee (ECC).

Despite fierce opposition from Pakistan’s auto industry, which warns that liberalizing commercial imports could cripple local manufacturing, endanger jobs, and raise FATF concerns over money laundering and anti-terrorism financing, the decision was made.

The TPB, with representatives from Commerce, Industries and Production, Finance, and the Federal Board of Revenue (FBR), finalized the decision after two consecutive meetings.

This move aligns with Pakistan’s obligations under the International Monetary Fund’s Extended Fund Facility (EFF), which mandates a gradual tariff reduction on used vehicles.

Starting FY26-Q1, quantitative restrictions on commercial imports of vehicles under five years old will be lifted, provided they meet environmental and safety standards. The age restriction will be entirely removed by July 2026.

Under the TPB’s finalized proposal, used vehicles will fall under PCT 8703, permitted only if compliant with standards set by the Ministry of Industries and Production or relevant authorities.

The plan strives to harmonize Pakistan’s tariff policy with global trade commitments while addressing environmental and safety concerns.

Local automakers have repeatedly demanded tighter regulations on used car imports, citing risks of deindustrialization. Pakistan’s auto sector, encompassing 13 major brands like Toyota, Honda, Suzuki, and Hyundai, supported by 1,200 auto parts manufacturers and employing 1.5 million workers, attracts approximately US$5 billion in investment and produces cars, trucks, buses, tractors, and motorcycles.

Industry representatives caution that tariff reductions and unrestricted commercial imports without age limits could undermine decades of investment and technology transfer.