FBR Imposes 40% Duty on Used Vehicle Imports

ISLAMABAD: On Thursday, the government announced that the Federal Board of Revenue (FBR) has imposed a 40% regulatory duty on the commercial import of used vehicles, in addition to existing customs duties.

According to SRO 1895 (1) 2025, issued by the Ministry of Commerce, the commercial import of vehicles less than five years old, classified under PCT headings 8702, 8703, 8704, and 8711, is permitted until June 30, 2026. Beyond this date, the age restriction may be lifted.

Imported vehicles must adhere to environmental, safety, and quality standards set by the Engineering Development Board (EDB), including mandatory testing and certification requirements.

The decision follows the approval of the scheme by the Economic Coordination Committee (ECC) of the Cabinet on September 18, 2025, chaired by Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb, with subsequent ratification by the federal cabinet.

The notification authorizes the government to levy the regulatory duty on used vehicles imported under clause (xvi) of serial No. 10 in Appendix-C of the Import Policy Order, 2022. The 40% duty will remain in place until June 2026, with plans to reduce it by 10 percentage points annually, reaching zero by FY30, as recommended by the Tariff Policy Board.

The SRO clarifies that these provisions will not supersede other rules related to the same PCT headings in the Import Policy Order, ensuring alignment with existing trade regulations.