Prime Minister Shehbaz Sharif has approved a comprehensive five-year tariff reform plan to be announced in the federal budget  2025-26, aiming to drastically reduce customs duties, additional customs duties, regulatory duties on raw materials and semi-finished goods, and a phased reduction in overall tariff protections for select industries.    The first phase of the reform, set to be launched with the next budget, introduces a simplified customs duty structure with slabs of 0, 5, 10, 15, and 20 per cent. The existing 16pc slab will be reduced to 15pc, while the 11pc rate will drop to 10pc. The 3pc slab will be abolished, with products either moved to a zero-duty category or the new 5pc slab. The proposed tariff overhaul is set to eliminate the additional customs duty of 2pc on 4,294 tariff lines in the upcoming budget. The plan also includes a reduction of additional customs duty from 4pc to 2pc on 545 tariff lines, from 6pc to 4pc on 2,227 tariff lines, and from 7pc to 6pc for all products currently subject to a customs duty above 20pc.       The government is set to slash regulatory duties, which currently reach as high as 90pc on various products, bringing them down to a maximum of 30pc. Finance Minister Muhammad Aurangzeb has also supported the major overhaul of the tariffs to boost industrial production in the country.      A further substantial cut is scheduled for next year’s budget, while the final three years of the plan will see a gradual, nominal reduction in tariffs.    According to estimates, this tariff rationalisation is projected to boost exports by approximately $5 billion by the end of the plan’s implementation, reinforcing Pakistan’s drive towards a more competitive global trade position. Industries such as auto, iron and steel, textiles, chemicals and plastics — currently shielded by effective tariff rates ranging between 100pc and 150pc — will see those rates reduced to around 50pc to 60pc. The premier said his government’s priority is to shift away from import substitution to an export-led growth strategy.       By the end of the five-year implementation period, the tar­iff overhaul will establish a uniform maximum duty slab of 15pc, eliminating sector-specific peaks that previo­usly exceeded 20pc — primarily affecting the auto industry. Regulatory duties, which presently range from 5pc to 90pc on various products, will also be fully eliminated over five years, easing import costs and improving market accessibility. Exports-led growth strategy The current high, complex, and discriminatory tariff structure has favoured only a few big businesses, which over time have become less efficient and unproductive. (ICE ISLAMABAD)

Fonte notizia: profit