Tariff Policy Board approves second-year tariff rationalisation plan

ISLAMABAD: The Tariff Policy Board (TPB), headed by the Ministry of Commerce, has reportedly approved the second-year tariff rationalisation plan under the National Tariff Policy (NTP) 2025–30, incorporating adjustments in Regulatory Duty (RD) rates of 1 percent, 2 percent, and 2.5 percent as proposed by the National Tariff Commission (NTC).

The revised rates will be applicable from July 1, 2026, well-informed sources in Commerce Ministry told Business Recorder.

TPB, sources said, finalized its recommendations on June 6, 2026 and forwarded to Federal Board of Revenue (FBR) after obtaining formal approval from Prime Minister, Shehbaz Sharif held on June 4, 2026.

READ MORE: NTP 2025-30: Tariffs for various sectors to be gradually cut, PM told

The sources said option-II for achieving the Year-II targets of NTP for FY 2026-27 was given in previous meeting of TPB. He reiterated that as per NTP, maximum CD slab for 2nd year will be 50 percent, therefore, all CD rates above 50 percent are required to be adjusted between 20 percent to 50 percent.

Similarly, maximum ACD in 2nd year will be 4 percent. To achieve this target, ACD rates might be reduced from 6 percent to 4 percent, from 4 percent to 2 percent, and from 2 percent to 0 percent.

In line with NTP, RDS are required to be eliminated by 2030 and maximum RD in second year of the implementation will be 20 percent.

Chairman, National Tariff Commission (NTC), presented an alternate proposal for implementation of the Year-II targets under the NTP 2025-30. He stated that NTC agreed with the working and proposals presented by the Ministry of Commerce, except removal of 2 percent ACD on edible oils, elimination of existing RDs of 1 percent, 2 percent, and 2.5 percent and rationalization of auto sector tariffs.

He proposed that existing 2 percent ACD on edible oil might be removed in order to provide relief to the consumers and to control prevailing food inflation. The estimated revenue loss of removal of 2 percent ACD on edible oil would be approximately Rs. 26 billion.

Regarding rationalization of tariffs on current RD rates of 1 percent (105 TLS), 2 percent (3 TLs), and 2.5 percent (105 TLs), due consideration might be given to local production and exports.

In case, goods are either locally manufactured or exported from Pakistan, existing RDs of 1 percent, 2 percent and 2.5 percent might be reduced by 20 percent. In case goods are neither locally manufactured nor exported, the existing RDs of 1 percent, 2 percent 0 percent.

He explained that under the proposed scheme, 1 percent RD (total 105 TLs), on 34 tariff lines might be reduced to zero, while 1 percent RDS on remaining 71 TLs might be reduced from 1 percent to 0.8 percent. Similarly, 2 percent RD (total 3 TLs) on one TL might be reduced from 2 percent to 1.6 percent whereas RDS on remaining 2 TLs might be reduced to 0 percent. While for the 2.5 percent RD (total 105 TLs), RD on 41 tariff lines might be reduced to zero, while RD on remaining 64 tariff lines might be reduced from 2.5 percent to 2 percent.

According to Secretary Commerce, three separate proposals had been presented before the Board, including proposals from the Ministry of Commerce, Rubina Athar, and the National Tariff Commission. He requested the Board to take a final decision on the Year- II tariff reduction path under the NTP 2025-30.

He further clarified that his role as Secretary, Ministry of Commerce, is to implement the NTP as approved by the Government, and in cases where any deviation from the policy is required, the concerned Ministry would need to seek approval from the Prime Minister.

SAPM on Industries and Production, Haroon Akhtar supported the proposal presented by the NTC regarding rationalization of RD rates of 1 percent, 2 percent, and 2.5 percent.

He observed that the NTC proposal is comparatively more refined and realistic. However, for RD rates above 2.5 percent, he supported the reduction path proposed by the Ministry of Commerce.

Copyright Business Recorder, 2026