ECC Imposes 40% Regulatory Duty on the Import of Used Vehicles
ISLAMABAD: The Economic Coordination Committee (ECC) has imposed 40% Regulatory Duty on the import of used vehicles under five years old. This new levy will apply in addition to existing customs duties.
Duration and Phased Reduction Plan
The duty will remain effective until June 30, 2026. After that, the government will gradually reduce the rate in accordance with the Tariff Policy Board’s roadmap.
Starting in the fiscal year 2026-27, the duty will decline by 10 percentage points each year. By FY2029-30, the additional levy will be eliminated, effectively bringing the rate to zero.
Purpose of the Regulatory Duty
According to officials, the measure is designed to regulate the inflow of imported used cars and protect the local automobile industry. It will also ensure a smooth and gradual transition toward liberalized trade in the automotive sector.
While the near-term higher tariff is expected to dampen imports, the planned reductions are likely to create greater consumer choice over the next five years. This approach balances industry protection with long-term market access.
ECC Meeting and Decision: ECC Imposes 40% Regulatory Duty on the import of Used Vehicles
The decision was finalized during an ECC meeting chaired virtually by Finance Minister Muhammad Aurangzeb from New York. Several federal ministers and senior officials participated in the session, reviewing the implications for trade, industry, and consumers before giving their approval.
Impact Outlook
Industry analysts suggest that the duty could stabilize demand for locally assembled vehicles in the short term. However, as the levy decreases over time, competition from imported used cars may increase, ultimately benefiting consumers through wider options and competitive pricing.
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