(Web Desk) – The Government of Pakistan and the International Monetary Fund (IMF) have reached an agreement on a new auto sector policy framework designed to modernize the industry and open up the market. The government plans to finalize the framework this month, with a formal presentation to the federal cabinet scheduled for next month.
The centerpiece of the new policy is a major shift in how imported vehicles are taxed. Over the next four years, additional customs and regulatory duties will be completely phased out. According to the Ministry of Industries and Production, these duty rates will see a gradual reduction until 2030. Starting in the 2027 fiscal year, additional duties will be cut by 10% annually, making the import system more transparent and lowering the overall cost for consumers.
In a move to increase variety for local buyers, the policy will also allow the import of used vehicles up to seven years old starting after the 2027 fiscal year. Beyond imports, the government is focusing on local manufacturing through the upcoming Motor Vehicle Development Act. This legislation, which is set to be approved by Parliament, aims to enforce stricter safety standards for vehicles produced within Pakistan, ensuring that locally made cars meet modern international safety requirements.
