Pakistan Removed the Age Cap on Commercial Used-Car Imports, and Cut the Duty

Pakistan has done two things to its used-vehicle import regime that rarely happen together: it legalised commercial importing, and it started taking the duty back off. The five-year age cap on commercially imported used vehicles fell away on 1 July 2026, and the regulatory duty that came with the scheme dropped from 40% to 30% on the same day. Much of the coverage reported that 30% as a new tax. It is not. It is a cut, and it is scheduled to keep cutting.

What actually changed on 1 July

Pakistan has permitted used-vehicle imports for years, but almost entirely through personal channels — the baggage, gift and transfer-of-residence schemes, which require an individual overseas Pakistani to stand behind each unit. A commercial dealer could not simply buy a container of stock and clear it in the company’s name.

That changed when the Ministry of Commerce amended the Import Policy Order, 2022 to create a commercial import route for used vehicles under PCT headings 8702, 8703 and 8704 — buses, cars and goods vehicles. The route opened with two conditions attached: a five-year maximum vehicle age, and a 40% regulatory duty on top of the existing customs duty and taxes.

Both of those conditions were written with expiry built in. The age limit was stated to apply until 30 June 2026, after which it stands removed. The regulatory duty was set to step down by about ten percentage points a year until it reaches zero.

The 30% is a reduction, not a new charge

When SRO 1065(I)/2026 was published, several outlets read the flat 30% printed in the notification and reported it as an additional duty imposed on used-car imports. PakWheels ran a fact-check on exactly this point, and its conclusion is the one the numbers support: the notification restates the rate at its new level, and that level is ten points below where it stood the day before.

The confusion was made easier by a second notification issued the same day. SRO 1064(I)/2026 dealt with the personal-import schemes — gift and transfer of residence — and also reduced rates there. Reading the two together as a stack of new charges rather than as a pair of cuts is the error.

What it does to a landed number

Regulatory duty in Pakistan is assessed on the customs value, alongside customs duty, and the whole assessed base then carries sales tax and withholding. That layering means a change in one rate does not move the final bill by the same proportion.

The worked example below shows the structure and the direction of the change only. It deliberately does not carry Pakistani customs duty, sales tax or withholding rates, because we could not verify the applicable rates for each engine band against a primary Federal Board of Revenue schedule at the time of writing, and this publication does not estimate a tax rate.

On a ten-unit container that is a US$10,000 swing on one line of the bill. It is real money, and it is also the smaller half of the story — the age cap is the change that alters what you are allowed to buy at all.

Does this apply to you?

It applies to you if you are importing vehicles into Pakistan as a business, in the company’s own name, through the commercial channel. It does not change the personal schemes, which most Pakistani buyers have historically used, and it does not change anything for a private buyer in Kenya, Ireland, New Zealand or anywhere else.

Where the cars come from

Removing an age cap changes the shape of what a Pakistani dealer can buy, not just how much of it. A five-year limit confines you to the newest and most expensive end of the Japanese auction halls. Without it, the seven-to-ten-year band opens — which is where the volume, and most of the value, has always been.

That band is also where reading the sheet matters most. A seven-year-old car with a genuine grade 4 and a clean auction sheet is a different proposition from a seven-year-old car with an R-grade repair history, and the difference does not show in a photograph. Our guide to Japanese auction grades sets out what each grade actually certifies.

Quality requirements did not disappear

The age cap going does not mean anything may now enter. Reporting on the scheme has consistently stated that imported vehicles must continue to meet safety, environmental and quality standards, with compliance oversight referred to the Engineering Development Board. We were not able to read a published inspection protocol naming the appointed inspection bodies, and we are not going to describe one we have not seen.

Move now or wait?

For a dealer, the argument for moving is that regulatory duty is on a published downward path, which means every year you wait, the same car lands cheaper. The argument against waiting is that the cars themselves do not stand still: a 2019 unit bought in 2029 is a ten-year-old car being taxed at zero regulatory duty and sold into a market that has had four more years of legal commercial supply arriving.

The taper rewards patience on tax and punishes it on the asset. Those two forces roughly cancel, which is why the honest answer is that the duty schedule should not be the thing that decides your timing. Stock availability and the yen should.

• The age cap is the change worth acting on. It widens your buying band immediately, and unlike the duty taper it is not scheduled to widen further.
• Price the whole bill, not the RD line. Regulatory duty sits inside a stack that includes customs duty, sales tax and withholding. Get a clearing agent to build the full assessment on a real chassis number before you bid.
• The taper is a notification, not a guarantee. Duty schedules with multi-year paths have been reset before, in Pakistan and elsewhere. Do not underwrite a 2029 margin on a 2026 SRO.

Is someone selling you something?

We are an importer, so read this line knowing that. Everyone with stock to move has an interest in a Pakistani dealer believing the door has swung wide open, and the “new 30% duty” framing has been useful to the opposite camp too — it makes local assembly look better protected than the notification actually leaves it.

The measured position is that a genuine liberalisation has happened, it is smaller in cash terms than the headlines on either side implied, and the piece of it that matters most is the age band rather than the rate. If you are importing one car for yourself, this changes nothing at all for you.

Duty, regulatory duty, sales tax and withholding rates are set by the Government of Pakistan and change without notice. The rates and dates above reflect notifications published by the Ministry of Commerce and the Federal Board of Revenue and were checked on 10 September 2026. Verify your own position with the Federal Board of Revenue or a licensed clearing agent before committing funds.