Govt Imposes 40% Tariff on Used Cars, Bans Import of Accidented Vehicles

The government has announced a 40% import tariff on used cars and banned the import of accidented vehicles in a move aimed at protecting the local auto industry. Speaking at a Senate standing committee meeting, Joint Secretary Trade Policy Mohammad Ashfaq confirmed the decision, citing commitments under the IMF programme.

Currently, car imports mainly occur through schemes like transfer of residence, baggage, and gift, meeting nearly one-fourth of local demand. However, despite liberalisation, local assemblers insist prices will remain high due to government taxes ranging from 30% to 61% of vehicle costs.

Industry representatives from Indus Motors and Pak-Suzuki argued that local production is costly, while importing used cars may soon become more profitable than manufacturing. Committee members criticised assemblers for poor quality and limited safety features compared to imported cars.

Under the IMF plan, tariffs will gradually reduce to 9.7% over five years, phasing out additional duties and exemptions. While the government believes this will bring efficiency, local manufacturers fear it could threaten domestic production.