Govt Unveils major tariff reforms, caps customs duty at 15%

May 20, 2025 (MLN): The government has unveiled major tariff reforms, including capping customs duty at 15% and phasing out additional customs and regulatory duties over the next four to five years, Prime Minister Shehbaz Sharif said.

The declaration came during a National Tariff Policy meeting chaired by the prime minister, who described the move as a historic step towards economic improvement.

According to a press release from the Prime Minister’s Office, these reforms are expected to promote export-led growth, reduce unemployment, control inflation, and attract foreign investment, ultimately generating new job opportunities.

Under the new policy, Additional Customs Duty currently ranging from 2% to 7% and Regulatory Duty which varies between 5% and 90% will be eliminated progressively over the next few years.

The customs duty will be capped at a maximum of 15%, a significant reduction from current rates that exceed 100% on some items, as per the press release issued.

The government has also simplified the tariff structure by reducing the number of duty slabs to four, easing legal complexities for importers and creating a more level playing field across industries.

Prime Minister Shehbaz Sharif emphasized his administration’s commitment to fostering a strong economy by creating jobs and controlling inflation.

He highlighted that the reforms followed extensive consultations with national and international economic experts, forming part of a broader plan for fundamental economic changes.

The prime minister stated that lowering tariffs will facilitate easier and more affordable access to raw materials, intermediate goods, and capital equipment for domestic industries.

This increased competitiveness is expected to help control inflation and stabilize the national currency. Furthermore, the reforms aim to help reduce the current account deficit and increase government revenue.

An implementation committee has been formed to oversee the effective execution of these reforms.

The meeting also included participation from Federal Minister Jam Kamal Khan, Ahad Cheema, Muhammad Aurangzeb, Ali Pervaiz Malik, Special Assistant to the Prime Minister Haroon Akhtar, and senior officials from relevant departments.

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