ECC Okays Commercial Import of Used Vehicles, Imposes 40% RD

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has given the green light to the commercial import of used vehicles, marking a major policy shift aimed at broadening market access while safeguarding local industry.

Federal Minister for Finance and Revenue, Muhammad Aurangzeb, chaired the ECC meeting virtually from New York on Thursday. During the meeting, the committee reviewed a detailed summary on the subject and unanimously approved the proposal to allow commercial imports of used vehicles.

According to the sources, the policy shift stems from IMF conditions requiring Pakistan to open commercial imports of cars up to five years old from September 2025 and remove all restrictions by July 2026. Over time, imports of six-to eight-year-old vehicles will also be allowed.

The ECC directed amendments to the Import Policy Order, 2022, enabling the formal importation of such vehicles under clear guidelines. The committee set an initial condition that only vehicles not older than five years will be permitted until June 30, 2026. After that date, the government will remove the age restriction entirely, allowing imports of vehicles of all model years.

The committee emphasized strict adherence to environmental and safety standards for all vehicles entering the country. Officials clarified that the importation process would remain subject to close monitoring to prevent misuse and to ensure compliance with international standards.

To protect local assemblers and balance trade, the ECC approved additional 40 percent Regulatory Duty (RD) on top of existing customs duties for imported used vehicles under five years old.

This additional duty will remain in effect until June 30, 2026. Starting July 2026, the duty will gradually decline by 10 percentage points annually, phasing out completely by fiscal year 2029-30.

The Tariff Policy Board recommended this phased reduction, and the ECC endorsed the framework.

In addition to the automobile sector decision, the ECC approved another important allocation. The committee sanctioned Rs 800 million as a Technical Supplementary Grant for the Pakistan Virtual Asset Regulatory Authority (PVARA), enabling the authority to strengthen its operations in overseeing digital assets.

The meeting drew participation from key cabinet members, including Federal Minister for Petroleum Ali Pervaiz Malik, Minister for National Food Security Rana Tanveer Hussain, Minister for Power Sardar Awais Ahmad Khan Leghari, as well as federal secretaries and senior officials from concerned ministries and regulatory bodies.

By approving this policy, the ECC has not only opened a new avenue for car buyers but also balanced the government’s focus on revenue generation, environmental safety, and industry regulation.

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