Pakistan slashes tariffs in major reform push, aims for region’s lowest rates

Finance Minister Muhammad Aurangzeb announced sweeping tariff reforms Tuesday as part of the newly proposed National Tariff Policy 2025-30, aimed at simplifying customs structures and boosting key economic sectors.

Delivering the federal budget speech in Parliament, Aurangzeb said the reforms, directed by Prime Minister Shahbaz Sharif, include the phased elimination of Additional Customs Duty (ACD) over four years and the abolition of Regulatory Duties (RDs) and the Fifth Schedule of the Customs Act, 1969, within five years.

Under the new policy, Pakistan will streamline customs duties into four slabs: 0%, 5%, 10% and 15%, with the highest tariff capped at 15%. The changes will be implemented gradually to minimize disruption for businesses and trade, the minister said.

Aurangzeb highlighted that the reforms will benefit multiple industries, including pharmaceuticals, information technology, telecommunications, textiles and engineering. The World Bank projects that once fully implemented, Pakistan’s tariffs will be the lowest in the region.

The finance minister expressed optimism that the policy would strengthen the country’s economy, calling it a "significant step toward sustainable growth."