Government decides to abolish duty on imported vehicles, new auto policy to come soon

The federal government has taken a decision in principle to eliminate duties on imported vehicles and this will be formally announced in the new five-year auto policy. The Ministry of Industries and Production has prepared a draft of this policy and consultations are currently underway with various stakeholders.

The IMF is also being taken into confidence on this policy and the final draft will be shared with the IMF by the end of this month, after which the policy will be presented to the federal cabinet for approval.

Under the new policy, customs duty will be reduced to 15 percent over a period of five years and the safety standards and licensing system of vehicles will also be tightened. The IMF is proposing to open the auto sector to new investors and review the duty tax structure.

However, local car manufacturers are not happy with this policy. They say that allowing five-year-old imported vehicles will harm local manufacturing. They have also suggested increasing the policy period to ten years instead of five and have demanded a clear declaration from the government as to whether it wants to promote manufacturing or only the automobile trade.