Tariff reform

THE planned import policy reforms to recalibrate tariffs in line with Pakistan’s industrialisation and export aims signify a major positive shift in the government’s economic and growth strategy. Prime Minister Shehbaz Sharif has approved a roadmap to drastically slash average customs tariffs from 19pc to 9.5pc in the next five years, besides eliminating decades-old distortive tariff protections for carmakers, steel producers, textiles manufacturers, the chemical sector, and others against foreign competition. Another key reform focuses on reducing the number of existing custom duty slabs from five to four, with peak tariffs lowered from 20pc to 15pc. The roadmap also envisages doing away with numerous regulatory and additional taxes on thousands of imported items to bring certainty, transparency and uniformity to cascading margins. The reforms are expected to boost exports by $5bn once the adjustments are phased in, starting with the next budget.