Prime Minister Shehbaz Sharif on Friday approved tariff reforms, limiting customs duty to the maximum of 15% and initiating the gradual elimination of additional and regulatory tasks in the next four to five years.
The decision was taken during a high level meeting on the national tariff policy, chaired by the Premier, and is being acclaimed by the Government as a key milestone towards export -led growth.
A declaration from the Prime Minister said that the reforms aim to reduce inflation, attract international investments and generate new employment opportunities.
“This movement is considered an important milestone towards economic improvement that will allow export -led growth. This decision is expected not only to help control unemployment, but also to maintain inflation under control. In addition, it will also encourage international investment, it will help create new job opportunities,” according to a press release from the PM office.
Currently, the additional customs duty varies from 2% to 7% and the regulatory duty varies from 5% to 90%. Both will be removed gradually. In some cases, the customs duty exceeds 100%, which leads to the Government to limit the limit greater than 15%.
The number of tariff slabs will also be reduced to four in an attempt to simplify import procedures and relieve compliance with companies.
“This is part of a broader economic reform agenda based on a wide consultation with national and international experts,” said Shehbaz. “The objective is to make the Pakistani industry more competitive, control inflation and improve the ease of doing business.”
Officials believe that the reforms will not only support national industries through cheaper imports of raw materials and machinery, but will also help reduce the current account deficit and increase income collection by encouraging legal imports.
An implementation committee has formed to supervise the gradual deployment of the new tariff regime.
The meeting was attended by federal ministers Jam Kamal Khan, Ahad Chema, Muhammad Aurengzeb, Ali Pervaiz Malik and special assistant of Prime Minister Haroon Akhtar, along with senior officials of the relevant departments.
