Import of CBUs: Has the Customs Duty Really Increased?

Much is being made of the latest Ministry of Finance SRO (S.R.O. 966(l)/2022) dated 30-06-2022. Some news outlets have covered this news as if the government has raised the regulatory duty on the import of CBU cars. A closer inspection of this SRO and the SRO (S.R.O. 840(I)/2021– dated 30-06-2021) it supersedes tells a different story. 

To allay the fears of many associated with Pakistan’s automobile sector, the government has not raised Customs/Regulatory duty on the import of CBUs. The only difference between the two SROs is the number of items – the old SRO contains 599 items while the latest SRO contains 611.  

Below, you will find cars related information from the old and the new SROs. And as you will see, there is no change in the Customs/Regulatory Duty in both. 

Description	S.R.O. 840(I)/2021 (Customs/Regulatory Duty%)	S.R.O. 966(l)/2022 (Customs/Regulatory Duty%)
New 4✕4	15	15
New Mini Vans	15	15
New 1001cc and above – upto 1300cc cars	15	15
New SUVs	15	15
New SUVs 4✕4	90	90
Old/used SUVs – 1801cc – 3000cc	70	70
Old/used Cars/Jeeps – 1801cc – 3000cc	70	70
Old/used Cars/Jeeps above  3000cc	70	70
Old/used Cars/Jeeps above  2000cc	70	70
Old/used Cars/Jeeps above  2500cc	70	70

Why Does the Government Want to Restrict Import of CBUs?

Though the government has not raised the Customs/Regulatory Duty on the import of CBU cars, there is no denying that it has left no stone unturned to restrict their import. 

From outright banning them to allowing limited import of CBUs, this and previous governments, time and again, have tried to dissuade people from buying imported cars. This is largely due to their compulsion of controlling the import bill. 

To limit the “Dollar Flight” from the country, the government has restricted the import of CKD kits as well. So, this policy doesn’t only affect the CBU units alone. 

To know more about this, read: Pakistan Automobile Sector Under the Mixed Economic System

By April 2022, a total CKD import worth $1.6B had taken place, which is almost 97% more from the previous fiscal year. This has ruffled some serious feathers in government circles which are desperate to control the import of cars and narrow the Current Account Deficit (CAD).

Do you agree with the government’s policy to restrict the import of CKD and CBU units? Or do you believe governments should not interfere and follow a laissez-faire approach?