In a significant move to attract investment and promote exports, the federal government has announced sweeping reductions in import duties, including a phased elimination of additional customs duty (ACD) and regulatory duty (RD) over the next four to five years.

According to a statement from the Prime Minister’s Office (PMO), Prime Minister Shehbaz Sharif has directed the abolition of ACD, currently ranging from 2% to 7%, and RD, which stands between 5% and 90%. The government has also approved a proposal to cap customs duty (CD) at a maximum of 15%, down from current rates that can exceed 100% on some items.

The number of customs duty slabs has been reduced to four, a move the government believes will simplify import regulations and create a level playing field for industries.

The decision was made during a key meeting on the National Tariff Policy at the Prime Minister’s Office. Chairing the session, PM Shehbaz reaffirmed his government’s commitment to economic reform, job creation, and the fight against inflation. He emphasized that the comprehensive plan for economic recovery was developed after extensive consultation.

“This move is a major milestone towards economic improvement and will pave the way for export-led growth,” the PMO statement said. The government expects the tariff cuts to help curb unemployment, control inflation, and attract increased international investment, ultimately creating new job opportunities.

The PMO added that the reforms will provide local industries with easier and more affordable access to raw materials, intermediate goods, and capital equipment, while also stabilizing the current account deficit and potentially generating higher revenue than current customs collections.

Prime Minister Shehbaz also formed an implementation committee to oversee the rollout of the new tariff policy.