In a bid to attract investment and promote exports, the federal government on Friday decided to significantly decrease import duties, including a phased elimination of additional customs duty (ACD) and regulatory duty (RD).
As per a statement released by the Prime Minister’s Office (PMO), PM Shehbaz Sharif has directed the abolition of ACD, which currently ranges from 2% to 7%, and RD, which currently ranges from 5% to 90%, over the next four to five years.
Additionally, he also approved a proposal to cap customs duty (CD) at a maximum of 15%. At present, CD can exceed 100% on some items.
Meanwhile, the number of CD slabs has been reduced to four, which the government believes will significantly cut legal complexities related to imports and ensure a level playing field for various industries, read the PMO statement.
The development came during a key meeting on the National Tariff Policy held at the Prime Minister’s Office. Chairing the meeting, PM Shehbaz reaffirmed his commitment that the government will spare no effort in achieving a strong economy, creating employment opportunities, and ensuring the complete and lasting elimination of inflation.
He said that a comprehensive plan for fundamental economic reforms has been formulated after extensive consultation. As part of this economic recovery agenda, the prime minister has approved a gradual reduction in import tariffs, read the statement.
“This move is being considered a major milestone towards economic improvement and will pave the way for export-led growth.
“The decision is expected to help curb unemployment and bring inflation under control. Moreover, it is likely to attract increased international investment, which will, in turn, create new job opportunities.”
As per the PMO, the decision will pave the way for more foreign investment and provide local industries with easier and cheaper access to raw materials, intermediate goods, and capital equipment.