For years, buying a car in Pakistan has felt like a distant dream for many due to skyrocketing prices and heavy taxes. However, a major shift is on the horizon. The government is currently finalizing a bold new five-year auto policy (2026–2031) that aims to make vehicle ownership much more affordable for the average citizen.
Developed in consultation with the International Monetary Fund (IMF), the new policy focuses on “liberalizing” the market. This means the government wants to encourage more competition by making it easier to import vehicles. The best part of this plan is the gradual removal of import duties on used cars, to eventually bring them down to zero.
To make the system clearer, the government is introducing a four-tier tariff structure with rates set at 0%, 5%, 10%, and 15%. According to the latest reports, the average tax on vehicles is expected to drop from the current 10.6% to 9.5% in the upcoming 2026-27 budget. By the year 2030, that number could fall as low as 5.99%.
This move isn’t just about imports; it is also designed to push local manufacturers to lower their prices and improve quality to stay competitive.
By removing “regulatory duties”, which often acted as a hidden tax, the government hopes to see a wider variety of cars on the road at much lower price points.
