Govt slaps 40% RD on used car imports

September 25, 2025 (MLN): The Economic Coordination Committee (ECC) has given the green light to a 40% Regulatory Duty (RD), on top of existing customs duties, on the commercial import of used vehicles less than five years old.

The levy will remain in place until June 30, 2026, after which it will be scaled back gradually in line with the Tariff Policy Board’s roadmap.

Starting FY2026-27, the duty will be reduced by 10 percentage points each year, reaching zero by FY2029-30.

The measure aims to regulate inflows of used cars, safeguard the local auto industry, and ensure a gradual transition towards market liberalization.

The higher near-term tariff could dampen imports but the phased reduction will likely open room for increased consumer choice over the next five years.

The decision was taken at an ECC meeting chaired virtually by Finance Minister Muhammad Aurangzeb from New York, with federal ministers and senior officials in attendance.

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