ISLAMABAD: The federal government is likely to reduce taxes on import of used cars in upcoming budget for fiscal year 2025-26.
The government has shared the proposal with the International Monetary Fund (IMF). The proposal includes allowing the import of vehicles up to five years old.
As part of the broader reform package, there are recommendations to gradually phase out Additional Customs Duty (ACD) on vehicles and reduce Regulatory Duties (RD). Reforms are also being considered under the Fifth Schedule of the Customs Act to facilitate these changes.
The government has recommended that no new regulatory duties be imposed on the auto sector and proposed an annual 10 percent reduction in tariffs on used vehicles.
Additionally, sources said there is a plan to eliminate non-tariff barriers affecting the auto industry.
The long-term strategy includes bringing down the average tariff on the auto sector to below six percent by the year 2030.
The federal budget will be presented in the National Assembly later today (June 10).
