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The Ministry of Industries has recommended eliminating customs and import duties under the new National Industrial Policy (NIP) 2025–2030 to revive Pakistan’s industrial competitiveness and promote export-led growth. The Federal Board of Revenue (FBR) has been urged to reduce Customs Duty (CD), Regulatory Duty (RD), and Additional Customs Duty (ACD) to achieve near-zero tariffs on industrial inputs and capital goods.
Pakistan’s manufacturing sector bears a heavy tax burden compared to real estate and services, discouraging industrial investment and exports. The new policy aims to correct this imbalance by reducing taxes and simplifying procedures to make Pakistani products more competitive regionally.
According to the NIP, tariffs on imported inputs and multiple taxation layers have made exports less profitable, forcing firms to focus on the domestic market. The policy proposes cutting average trade-weighted tariffs to below 5% by 2030 and eliminating RD and ACD within five years. It also recommends lowering corporate income tax rates from 29% to 25–26% and phasing out the super tax on large firms.
A ministry official noted,
“High taxes are choking industrial growth. Tariff reforms will enable Pakistan to integrate with global value chains.”
The plan includes reviewing VAT on export inputs, abolishing withholding taxes on imports, and introducing fast-track tax refund systems to improve exporters’ liquidity.
The reforms align with Pakistan’s long-term strategy to move from import substitution to export promotion, aiming to stimulate investment, job creation, and sustainable growth in key manufacturing sectors.
