Tariff Imposed on Used Cars

To improve the vehicle quality and safety on the roads, the government has taken another initiative. In recent news, the government has announced to impose a 40% increased tariff on the import of used cars. Have a look at the further details in the blog.

Reason for the 40% Tariff on the Import of Cars

The sole reason for this imposed tariff on the import of cars is to protect the local car market and to ensure road safety. However, in the joint meeting with the Senate Standing Committees on finance and industry, Mohammad Ashfaq declared that the import of low-quality and accidental cars will not be permissible in the country.

Furthermore, upon agreement with the International Monetary Fund (IMF), a 40% tariff is imposed on used cars from this fiscal year. However, the IMF has required Pakistan to permit the import of used cars up to five years old. The following are some further important points to be considered in this regard:

The tariff will gradually be reduced to zero over the next 4 years.
The import of vehicles for 6 to 8-year-olds vehicle will be allowed later.
Reduction in tariffs from 20.2% to 9.7% over five years.

PAMA and PAAPAM’s Concerns

The following are the concerns raised by the Pakistan Automotive Manufacturers Association (PAMA) and the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM):

The risk of fewer job opportunities due to the reduced car assembly in Pakistan.
The import of used cars might attract people as they have lower prices.

Conclusion

To sum up, the government has decided to impose a 40% tariff on the import of used vehicles. The consumers might be hoping for the lower prices of vehicles, but now have to experience the imposed tariff. However, it is said that the tariff will be reduced to zero in the next 4 years.