Prime Minister Shehbaz Sharif has greenlit a sweeping Rs. 120 billion reduction in import taxes for the upcoming budget, aiming to simplify Pakistan’s customs structure and boost foreign competition over the next five years. However, the automobile sector will remain untouched, with existing import duties left firmly in place.

According to a report by The Express Tribune, this bold reform will see the number of customs duty slabs trimmed from five to four: 0 percent, 5 percent, 10 percent, and 15 percent. The 3 percent slab, which currently covers 972 items, will be eliminated entirely. Meanwhile, the 11 percent slab (1,121 items) will be reduced to 10 percent, the 16 percent slab (545 items) will drop to 15 percent, and the 20 percent slab (2,227 items) will be gradually phased out.

In addition, the government plans to abolish additional customs duties over the next four years and remove regulatory duties within five years. Despite these sweeping changes, import duties on automobiles will remain unchanged, a move likely to disappoint car enthusiasts and industry players hoping for relief.

The finance ministry and the Federal Board of Revenue have thrown their weight behind the plan, but not everyone is on board. The commerce ministry has raised concerns, warning that slashing import duties could contradict established tariff principles and may not actually lower production costs, given persistently high energy and input prices.

The Prime Minister also shot down a proposal to introduce six duty slabs, instead opting for a flatter, more streamlined structure designed to enhance Pakistan’s export competitiveness.