Pakistan plans to liberalize the import of five-year-old used cars: a highly protected market may usher in a major turn

The federal government of Pakistan is studying adjusting its automobile import policy. One of the items that has attracted the most market attention is the lifting of import restrictions on "used cars no more than 5 years old."

According to Pakistan's "The News" report, the federal government of Pakistan is studying adjusting its automobile import policy. One of the items that has attracted the most market attention is the lifting of import restrictions on "used cars no more than 5 years old." The news was disclosed by Jawad Paul, Secretary of the Ministry of Commerce of Pakistan, at a meeting of the Standing Committee on Finance and Taxation of the National Assembly.

If the relevant reforms are finally implemented, it will become one of the most important policy changes in the Pakistan automobile market in recent years, and may also have a significant impact on the long-protected local automobile industry.

The tariff system is planned to be comprehensively adjusted, and the cost of automobile imports is expected to fall

According to the national tariff policy plan submitted by the Ministry of Commerce to the Committee, Pakistan plans to gradually reduce import tax burdens and reorganize the tariff structure in the next five years.

Specifically, these include: gradually eliminating Additional Customs Duty (ACD) in the next five years; gradually reducing Regulatory Duty and eventually reducing it to zero; controlling the maximum rate of ordinary tariffs within 15%; controlling the maximum rate of regulatory taxes within 20%; abolishing low-end regulatory tax rates such as 1%, 2%, and 2.5%.

In the automotive sector, the regulatory tax on imported used cars is expected to be lowered from the current 40% to 30%.

Pakistan's Ministry of Commerce stated that the goals of these reforms are to enhance market competition, improve consumer welfare, and promote the development of Pakistan's tariff system in a digital and international direction.

The five-year vehicle age limit may be cancelled, and market competition will intensify

What attracted the most industry attention in this discussion was that the government was considering abolishing the current "five-year-old second-hand car import restriction."

At present, Pakistan's automobile imports have long been subject to strict restrictions, and local assembly companies enjoy high protection. Syed Naveed Qamar, chairman of the committee, bluntly stated at the meeting that Pakistan's automobile industry has been in a state of high protection for many years, and increasing imports will help introduce competition and ultimately reduce consumer car purchase costs.

The Ministry of Commerce also stated that the main purpose of lifting the restrictions is to expand consumer choices;

Increase market openness; introduce more competition; and push car prices back to reasonable levels.

If more used cars under 5 years old are allowed to enter the market in the future, it will undoubtedly be good news for Pakistan consumers who have long faced high car prices.

Imported cars and domestic cars will implement the same safety standards

In addition to tariff and access policies, the Pakistan government also plans to unify the automobile safety regulatory system.

The Secretary of the Ministry of Commerce revealed that the 62 safety standards currently implemented for imported vehicles will also be simultaneously applied to locally manufactured vehicles in the future.

In addition, the government also specifically mentioned the abuse of the Personal Baggage Scheme import policy in the past. Previously, some passports and identity information that met the condition of "living overseas for more than 180 days" were borrowed to assist in the import of vehicles. Relevant supervision is expected to be further strengthened in the future.

Source: Guangdong Good Car

[Disclaimer] The content of this website (including pictures and texts) originates from the Internet, and the copyright belongs to the original author. Respect the rights and interests of originality, and select content is only used for information sharing. If copyright disputes are involved, please contact us to handle them in a timely manner