On 21 March 2016, the Ministry For Industries and Production released Pakistan's Automotive Development Policy 2016-21. The below incentives for new and existing manufacturers as well tariff amendments for importers were announced in this policy.
The import tariff structure has been rationalized as follows -
- For passenger and motor vehicles
- Import duty on sub components increased from 5% to 10%
- Import duty on non-localized Completely Knocked Down kits reduced from 32.5% to 30% and on localized kits from 50% to 45%
- Import duty on Completely Built Units (CBUs) of vehicles up to 800cc reduced to 40%from 50%, from 55% to 45% on CBUs between 801 to 1000cc, from 60% to 50% for CBUs between 1001cc to 1500cc, and from 75% to 65% for CBUs between 1501cc and 1800cc, applicable for the years 2017-18 and 2018-19,
- For motorcycles, motorcycle rickshaws, auto rickshaws and other 3 wheeler cargo loaders
- Import duty on sub components increased from 5% to 10%
- Import duty on non localized CKD units is rationalized from 15-20% to 15% and on localized CKDs from 47.5-50% to 45%
- Import duty on CBUs have been rationalized from 50-65% to 50%
- Prime movers, buses, Heavy Commercial Vehicles (HCVs) and trailers
- Import duty on CKD for prime movers rationalized at 5% for both non-localized (earlier 10%) and localized (earlier 0%) units
- Import duty on CBU for prime movers rationalized at 20% for both CBUs below 280 HP (earlier 30%) and above 280 HP (earlier 15%)
- Import duty on sub-components for Buses and HCVs (above 5 tons) has been increased from 5% to 10%
- Import duty on CBU units of HCVs above 2 Axles has been reduced 30% to 20%
The following incentives are provided to Greenfield Investments i.e. installation of an assembly and manufacturing facility for the production of a make of vehicle not manufactured/assembled in Pakistan
- One-time duty free import of plant and machinery for setting up the plant
- 100 vehicles of the same variants can be imported in the form of CBUs at 50% of the prevailing duty for marketing purposes after the groundbreaking of the project
- Reduced import duty on non-localized car parts at 10% and 25% in case of localized parts for a period of 5 years (applicable on cars and LCVs)
The following incentives are provided to Brownfield investments i.e. revival of existing assembly/manufacturing facilities that have become non-operational before 1 July 2013
- Reduced import duty on non-localized car parts at 10% and 25% in case of localized parts for a period of 3 years (applicable on cars and LCVs)