Pakistan sees early success in tax and tariff reforms

Prime Minister Shehbaz Sharif on Saturday chaired a weekly review of Pakistan’s ongoing tax and tariff reforms, describing the early results as “clear and positive.”

Sharif said recent economic indicators underscore the government’s reform agenda, noting that the pace of growth was improving “day by day,” with tangible benefits recognized by both the business community and the public.

Officials at the meeting reported that this year’s tariff reforms had not harmed revenue collection. On the contrary, duties and taxes collected at the import stage rose 25%, despite only a 3.6% increase in the volume of dutiable goods — challenging earlier concerns that lower tariffs would reduce government revenue.

Duty-free imports also surged by 41.5%, primarily driven by raw materials and intermediate goods. Officials described the increase as a sign of expanding industrial activity and rising productivity within the manufacturing sector.

The government’s economic strategy, which includes reduced tariffs and an updated tax framework, is designed to strengthen manufacturing and exports while creating a more attractive environment for domestic and foreign investment. Tariff adjustments, in particular, aim to lower the cost of industrial inputs, boost competitiveness in global markets, and support export growth.

Customs reforms were also highlighted during the meeting, with officials stating that modernization efforts at the Federal Board of Revenue (FBR) are helping transform the institution into a more transparent, efficient, and accountable agency.

Sharif instructed authorities to intensify administrative and institutional measures to curb tax evasion and close loopholes in key sectors, including tobacco and tiles. He commended the FBR and the finance team, urging faster implementation of reforms to help Pakistan navigate economic challenges and achieve long-term development objectives.

The meeting was attended by Finance Minister Muhammad Aurangzeb, Climate Change Minister Dr. Musadik Malik, Petroleum Minister Ali Pervez Malik, State Minister for Finance Azhar Bilal Kayani, chief secretaries of all provinces, the FBR chairman, and other senior officials.