ISLAMABAD: The Pakistani government is planning to raise regulatory duties on imported used cars in the upcoming budget for 2024-25, aiming to bolster the local automobile industry.
Under the proposed plan, there would be a 30 percent increase in regulatory duty for cars with engine capacities exceeding 1800cc, potentially resulting in a duty of up to 100 percent. Additionally, a 15 percent duty is suggested for used vehicles with engine capacities up to 1800cc. However, both new and old hybrid vehicles up to 1800cc would remain duty-free.
This move comes in response to a significant surge of 255 percent in car imports last year, attributed to low regulatory duties. Imports amounted to $210 million in car value, with Rs170 billion spent on car parts for local assembly, necessitating Rs600 million in foreign exchange to procure these parts internationally.
Despite local automakers’ significant investments amounting to billions and their contribution of about Rs400 billion in taxes in FY2022, alongside the creation of job opportunities, the surge in imports poses a challenge.
The alarming statistics reveal that in February 2024 alone, 3213 units were imported, a stark contrast to the 396 units imported in the same month of FY2023, marking a staggering 713 percent increase. Furthermore, the share of used car imports has surged to 30 percent in the current FY23-24, compared to just 4 percent in the entire FY22-23.
