Govt Announces Rs200bn Relief in Major Tariff Overhaul to Boost Exports

ISLAMABAD (Web Desk) — The government has announced a five-year plan to simplify tariffs and reduce import duties to promote exports and support industrial growth.

Key Features of the Tariff Reform Plan:

1. Reduction in Duties:

   • Over 7,000 tariff lines will see the gradual removal of additional customs and regulatory duties.

   • In the first year, the government will lower import duties by Rs200 billion, eliminating extra duties on raw materials.

2. Corporate Tax Relief:

   • A 0.5% reduction in the super tax rate for income brackets between Rs200 million and Rs500 million.

3. Target for Exports:

   • The government aims to boost exports by $5 billion by the end of the five years, helping Pakistan compete better in global trade.

4. Simplified Duty Structure:

   • The new system will have fewer tax slabs, with duties at 0%, 5%, 10%, 15%, and 20%.

   • The current average tariff will be reduced from 19% to 9.5% over five years.

5. Gradual Duty Reductions:

   • Customs duties on over 4,000 tariff lines will be cut, with some completely eliminated.

   • Duties on many goods will drop, including synthetic staple fibre and products in the 595 PCT code.

6. Tariff Adjustments for Key Industries:

   • Industries like auto, textiles, iron, steel, chemicals, and plastics will see reduced tariff rates from 100%-150% to about 50%-60%.

7. Phasing Out Tariff Exemptions:

   • The government will phase out industry-specific tariff exemptions and apply a more uniform tariff structure across all sectors.

Goals of the Reform:

• The aim is to make Pakistan’s industrial sector more competitive, reduce the complex tariff system that favors big businesses, and improve efficiency in the economy.

By cutting tariffs and simplifying the system, the government hopes to reduce costs for businesses and consumers, improve market access, and support the growth of export industries.