The federal government is preparing to reduce Pakistan’s average import taxes by more than 50% over the next five years under a new tariff policy aimed at lowering business costs, boosting economic activity and increasing market competition.

According to official sources, the proposed National Tariff Policy 2025-30 seeks to reduce the country’s average tariff rate from 20.19% to 9.70% through phased cuts in customs duties, additional customs duties and regulatory duties.

Officials estimate the reforms could reduce government revenue by around Rs143 billion, but expect lower import costs to encourage investment, improve industrial competitiveness and make imported goods more affordable.

Under the proposal, the maximum customs duty will be capped at 15% within five years. Additional customs duties, currently as high as 6%, will be gradually eliminated, while regulatory duties will be capped at 20% before being phased out.

The government also plans to reduce the average customs duty rate to 16.56% during the implementation period.

Sources said the Engineering Development Board (EDB) has recommended applying the same tariff structure to locally assembled and imported vehicles to create a more competitive automotive market.

The policy is designed to create a level playing field for domestic manufacturers and importers while aligning Pakistan’s tariff regime with international standards. Officials say the reforms are intended to modernize industry, simplify the tariff structure, improve transparency and support long-term economic growth.

The National Tariff Policy 2025-30 is expected to be implemented in phases after receiving the required government approvals.