Car Prices in Pakistan to Decrease After IMF-Backed Tariff Cuts
- Abeera Marium Siddiqui
- March 24, 2025
- 12:47 pm
- 38
- Current Affairs
Car prices in Pakistan to decrease as the government and the International Monetary Fund (IMF) agree to lower import tariffs. The move will boost competition in the auto sector and make vehicles more affordable. The new policy will take effect in July 2025, reducing import and regulatory duties to benefit consumers and the economy.
Major Tariff Reductions Will Reshape the Auto Sector
The IMF-backed agreement will cut the weighted average tariff from 10.6% to 6% over five years. This will make Pakistan’s tariffs the lowest in South Asia.
For the automobile sector, all additional customs and regulatory duties will be eliminated by 2030. The maximum import tariff will be capped at 20%.
The government will implement these cuts under two key policies:
- National Tariff Policy: Reducing tariffs to 7.4% by 2030
- Auto Industry Development and Export Policy (AIDEP): Cutting tariffs further, focusing on the automobile sector
Apart from cars, the overall weighted average tariff will be 7.4%, slightly higher than the planned 7.1%.
Key Changes Under the New Policy
The policy will introduce several reforms:
- Elimination of Additional Customs Duties by July 2025
- 80% Reduction in Regulatory Duties on various imports
- Abolition of 7% Additional Customs Duty on specific goods
- Removal of 2% Duty on Zero-Tariff Slabs
For vehicles, regulatory duties will drop by 55-90% in the first year. More reductions will follow in the coming years. A 6% customs duty slab will also be introduced.
How Will This Impact Car Prices in Pakistan?
With import duties cut, vehicle prices will drop, making cars more affordable for buyers. The lower tariffs will attract foreign car manufacturers, increasing competition and giving consumers more choices.
The government is also looking at Saudi Arabia’s gaming and tech policies as a model to modernize Pakistan’s auto industry. The federal cabinet is expected to approve the new tariff policy by June 2025. Full implementation will take place in the 2025-26 budget.
These reforms will bring a new era of affordability and competition to Pakistan’s automobile industry. Consumers across the country can expect lower car prices and better vehicle options in the coming years.
