FBR imposes new duty on commercial imports of used vehicles

ISLAMABAD: The Federal Board of Revenue (FBR) has levied a 40 per cent regulatory duty on commercial importations of used and old vehicles.

According to S.R.O. 1898(I)/2025 issued on Thursday, this 40% charge is over and above the regulatory duty already charged through S.R.O. 1152(I)/2025.

The notification invokes powers under sub-section (3) of section 18 of the Customs Act, 1969.

This step is a part of a wider policy shift in imports where the government will now allow commercial import of five-year-old cars, but with an extra 40% tariff in FY26.

It is applicable to second-hand cars under PCT headings 8702, 8703, 8704, and 8711, available under clause (xvi) of Appendix C Import Policy Order 2022.

The additional duty will be imposed over and above the current regulatory duty under the previous SRO (1152) of June 30, 2025.

The government intends to bring down this additional 40% duty by 10 percentage points annually, eliminating it by 2029-30.

The step is in line with Pakistan’s obligations under the IMF program to phase out tariffs gradually and allow imports of used vehicles on controlled terms.