Karachi, April 2, 2025 – The Federal Board of Revenue (FBR) has released its latest report, revealing that the automotive sector, particularly Original Equipment Manufacturers (OEMs), leads in availing customs duty relief.
According to the report, the cumulative customs duty expenditure for the top ten categories reached Rs. 445,122.88 million, accounting for 82% of the total customs duty expenditure. This figure represents 12% of the total tax expenditure for the fiscal year 2022-23.
The FBR highlighted that the customs duty relief provided under various exemption orders and schedules significantly benefited multiple sectors, with the automotive sector emerging as the primary recipient.
The OEMs in the automotive sector alone received customs duty relief worth Rs. 93,849 million, making it the leading category in terms of exemptions. Additionally, vendors within the automotive sector also benefited substantially, with customs duty exemptions totaling Rs. 38,344 million.
Following the automotive sector, the poultry and textile industries, along with other miscellaneous sectors, availed customs duty relief amounting to Rs. 83,763 million under Part III of the Fifth Schedule of the Customs Act. Similarly, relief was extended to local industries involved in the manufacturing of stationery, electrical capacitors, pesticides, and other essential products, which received Rs. 38,344 million in customs duty exemptions.
Other significant beneficiaries included Export Oriented Units (EOUs), which received customs duty relief of Rs. 34,465 million, and essential edible items such as pulses and oil products, which accounted for Rs. 34,069 million in exemptions.
The pharmaceutical sector also secured customs duty relief of Rs. 34,036 million through the import of active pharmaceutical ingredients. Furthermore, customs duty exemptions for the import of plant, machinery, and capital goods amounted to Rs. 32,438 million, facilitating industrial growth.
The report also underscored the impact of Free Trade Agreements (FTAs), particularly with China, which resulted in customs duty exemptions worth Rs. 32,327 million. Additionally, Export Processing Zones (EPZs) benefited from Rs. 23,488 million in customs duty relief, promoting export-oriented industrial activities.
The FBR emphasized that the customs duty relief mechanisms play a crucial role in fostering economic growth by reducing costs for key industries. With the automotive sector leading the charge, customs duty exemptions continue to shape the economic landscape by encouraging investment and industrial expansion across multiple sectors.