In a move aimed at discouraging the large-scale entry of old and used vehicles into the local market, the Federal Board of Revenue (FBR) has slapped an additional 40 percent regulatory duty (RD) on their commercial import.
According to S.R.O. 1898(I)/2025 issued on Thursday, the new levy will apply to vehicles falling under PCT Heading 8702, 8703, 8704, and 8711 of the Customs Act, 1969. The RD will be imposed in addition to the existing duty already enforced under S.R.O. 1152(I)/2025.
The notification specifies that the decision is aligned with the Import Policy Order 2022, which allows the import of used vehicles under certain conditions. The Ministry of Commerce had already notified the framework for such imports, and the FBR’s latest measure adds a significant fiscal burden on importers.
Industry insiders believe the move reflects the government’s attempt to protect local auto manufacturers while also addressing concerns over foreign exchange outflows linked to vehicle imports. However, stakeholders caution that the additional duty may also limit consumer choice and increase the cost of used cars in the market.
The latest development underscores the government’s strategy of using fiscal measures to manage the auto sector’s demand-supply dynamics, balancing between domestic production support and consumer affordability.
