Government unveils sweeping tariff cuts, regulatory simplification, and enforcement reforms under National Tariff Policy 2025–30
The federal government, under Budget 2026–27, has introduced a comprehensive overhaul of the customs duty structure aligned with the National Tariff Policy (NTP) 2025–30.
The reforms aim to simplify trade procedures, improve system efficiency, promote economic activity, and provide targeted relief to key industrial and public health sectors. The policy also emphasizes transparency, trade facilitation, and modernization of customs operations.
Tariff Rationalization Under NTP 2025–30
A major component of the reforms is the rationalization of customs tariffs across multiple sectors. The government has reduced customs duty slabs from 20% to 15% and 10%, while bringing 15% and 10% categories down to 10% and 5%.
Additionally, goods previously taxed at 5% are being reduced to zero on selected input items. These adjustments cover 92 tariff lines aimed at lowering production costs for industries.
Reduction in Additional Customs Duty (ACD)
Significant reductions in Additional Customs Duty have also been introduced. The ACD rate has been lowered from 6% to 4% across 449 tariff lines, from 4% to 2% on 2,107 lines, and completely eliminated (2% to 0%) on 569 tariff lines, providing broad-based relief to importers and manufacturers.
Regulatory Duty (RD) Reforms
The Regulatory Duty framework has been revised to ensure consistency and competitiveness. Duties above 20% are capped at 20%, while rates between 2.5% and 20% have been reduced by 20% across 1,347 tariff lines. Lower RD slabs of 1% to 2.5% are either reduced or fully eliminated across 208 tariff lines.
Exemptions and Sectoral Relief
The exemption regime has been expanded to support critical sectors. Customs duty relief is granted on cancer-related APIs, agricultural machinery, defense imports, and specialized construction vehicles.
Import exemptions are also provided for bulletproof vehicles for security-related and international events. Additionally, 15 new PCT codes have been introduced for improved trade classification.
Customs Law and Enforcement Reforms
Legal reforms include faceless adjudication, stronger penalties for terminal operators, and tighter controls against smuggling and misdeclaration.
Digital scanning of cargo has been formally legalized, while auction procedures are being modernized for transparency. Authorities will also have enhanced powers to freeze illicit assets and streamline seizure procedures, strengthening enforcement efficiency and reducing litigation delays.
