Government considers reducing taxes on used car imports in budget 2025-26

The federal government is considering making used cars more affordable under the National Tariff Policy as part of the upcoming budget.

According media reports, the government has proposed to the IMF a reduction in taxes on the import of used vehicles.

Sources reveal that the upcoming budget may include a proposal to allow the import of cars up to five years old.

It also includes recommendations for gradually phasing out additional customs duties and reducing regulatory duties on vehicles.

The sources further indicate that reforms to the Fifth Schedule of the Customs Act have been proposed.

Read more: What's in Budget 2025-26 for common man?

These include a recommendation not to impose any new regulatory duties on the auto sector and to reduce tariffs on used vehicles by 10% annually.

Additionally, there is a proposal to eliminate non-tariff barriers in the auto sector and to reduce the average tariff on the sector to below 6% by 2030.

It is worth noting that the federal budget for the next fiscal year, amounting to approximately Rs. 18 trillion, is being presented in the National Assembly today, which includes nearly Rs. 2 trillion in new taxes.