FBR Imposes Fresh Used Cars Duty from October 2025

The Federal Board of Revenue has announced a 40 percent regulatory duty on commercial imports of used vehicles up to five years old.

According to the FBR notification, the new duty will take effect from October 1, 2025, and applies to all eligible commercial import consignments.

This regulatory duty will be levied in addition to the tariff imposed earlier on July 1, increasing the financial burden for used vehicle importers.

The FBR emphasized that all importers must comply with the notification or face penalties and clearance delays at ports nationwide.

Officials confirmed that the government has allowed the commercial import of five-year-old vehicles until June 30, 2026, under IMF-agreed conditions.

From July 2026, the age limit for used imports will be removed, with duties reduced by 10 percent annually until fiscal year 2029-30.

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In June, the government had permitted the commercial import of five-year-old used vehicles from September 2025 with a 40 percent additional tariff.

Officials clarified that overseas Pakistanis will still be restricted to importing three-year-old vehicles under the baggage scheme, with no changes in duration.

This facility is exclusive to commercial importers, while the baggage, transfer of residence, and gift schemes for overseas Pakistanis will continue with restrictions.

Authorities confirmed that the additional tariff on used vehicles will gradually decline, falling to 30 percent next year before eventually being phased out.

The decision was reportedly influenced by the International Monetary Fund, which approved the commercial import of five-year-old vehicles into Pakistan.

Local automobile manufacturers, mainly Japanese companies, had opposed the move, but the FBR argued it would boost revenue through additional imports.