Islamabad, May 16, 2025 – In a bold step towards comprehensive trade and economic reform, the Government of Pakistan has announced a sweeping overhaul of its Customs tariff structure by capping the maximum customs duty at 15% and reducing the number of duty slabs to four.
Prime Minister Shehbaz Sharif made the announcement following a high-level meeting on the National Tariff Policy, terming the initiative as a “historic economic milestone.”
Under the new structure, all existing customs duty rates exceeding 15% will be gradually brought down, while Additional Customs Duty (ACD) and Regulatory Duty (RD)—currently ranging from 2% to 90%—will be phased out over the next four to five years. These duties have long been seen as barriers to trade and obstacles to industrial growth, particularly for sectors reliant on imported raw materials and machinery.
The reduction in customs duty slabs from a complex multi-tiered system to just four simplified categories is expected to eliminate ambiguity, streamline import procedures, and provide equal treatment to industries across various sectors. This simplification will also enhance transparency and reduce opportunities for misdeclaration and under-invoicing at ports.
Prime Minister Shehbaz Sharif emphasized that the restructuring of the customs duty regime was developed after thorough consultations with domestic and international economic experts. The objective, he said, is to pave the way for export-led growth, reduce inflationary pressures, stabilize the current account, and boost foreign direct investment.
“This decision is a turning point in Pakistan’s journey towards a modern, inclusive, and competitive economy. It will help make our industries more efficient, improve access to affordable inputs, and support job creation while attracting global investment,” the PM Office stated.
The reform package is also expected to support small and medium enterprises (SMEs), which often struggle under high customs duty rates and regulatory complexity. By reducing duty slabs and rationalizing tariffs, the government aims to create a more conducive environment for business growth.
To ensure proper execution, the prime minister also formed an implementation committee to monitor and oversee the rollout of these measures. Senior officials, including Federal Ministers Jam Kamal Khan, Ahad Cheema, Finance Minister Muhammad Aurangzeb, and PM’s Special Assistant Haroon Akhtar, attended the meeting.
The new customs policy is anticipated to be a game-changer for Pakistan’s economic landscape.