The first phase of the government reduction plan to lower import duties under the National Tariff Policy 2025-30 will be implemented in the upcoming budget 2025-26 and will be fully implemented in five years, read a circular issued by the Engineering Development Board (EDB).
“The government has decided to substantially lower import duties under the National Tariff Policy 2025-30. The first phase of the reduction plan will be implemented in the budget 2025-26 and will be fully completed in five years,” read the circular, dated 17th May, 2025.
It said that tariff slabs will be reduced from the existing five to four under the five-year plan, whereas the maximum slab rate will be set at 15% by reducing it from the current 20% over five years.
“According to the Prime Minister’s directions, with a focused strategy of export-led growth, following tariff reforms shall be made an integral part of draft National Tariff Policy 2025- 30: 1. Elimination of additional customs duty (ACD) in 04 years, starting from this budget; 2. Elimination of regulatory duty (RD) in 5 years; 3. Phasing out of the 5th Schedule in 5 years; 4. Four customs duty slabs (0%, 5%, 10%, and 15%); and 5. Maximum customs duty at 15%,” read the document.
As per the circular, currently, there are five slabs, i.e. 0%, 3%, 11%, 16% and 20%, and it has been decided to abolish the 3% slab and move tariff lines to either zero or 5%.
“The 11% slab will be lowered to 10%, and the current slab, 16%, will be reduced to 15% in the budget,” it said. Whereas, the slab of 20% rate will be abolished gradually.
Meanwhile, the Fifth Schedule of the Customs Act, which deals with imports of capital goods and industrial raw materials, will be abolished in five years.
The EDB urged all the stakeholders to examine the plan and give their input on how these changes will affect different industrial sectors, product lines, economic growth, and export performance.
Last week, in a move aimed at revitalising Pakistan’s struggling economy, Prime Minister Shehbaz Sharif unveiled a sweeping new tariff policy, capping customs duties at 15% and announcing the phase-out of additional and regulatory duties over the next four to five years.
The announcement, made during a high-level meeting on the country’s National Tariff Policy, chaired by the prime minister.
“This is a turning point,” said Sharif, describing the reforms as a crucial step in driving economic growth through a smarter, more equitable trade policy.
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