Islamabad: Pakistan has reached an agreement with the International Monetary Fund (IMF) to reduce its weighted average import tariffs to 6 percent over the next five years, down from the current 10.6 percent. The move aims to open the economy to greater foreign competition, making Pakistan the country with the lowest tariffs in South Asia.
The reduction, set to take effect from July 2025, is expected to have a significant impact on various industries, particularly the auto sector, where car prices are likely to decrease due to lower import costs. Under the new framework, all additional customs and regulatory duties on vehicles will be eliminated by 2030, with the maximum import tariff capped at 20 percent. Regulatory duties on automobiles will see reductions of 55-90 percent in the first year alone.
The policy will also eliminate additional customs duties, cut regulatory duties by 80 percent, and remove several concessions under the Customs Act’s fifth schedule. A 7 percent additional customs duty on certain goods and a 2 percent duty on zero-tariff slabs will also be withdrawn, starting in July this year.
While the IMF initially proposed reducing the weighted average tariff to 5 percent, the federal government has committed to a 6 percent target. The new tariff structure is expected to be approved by the federal cabinet before the end of June and will be implemented as part of the 2025-26 budget.
With these changes, Pakistan aims to enhance trade liberalization and reduce costs for consumers, especially in the automobile sector, where high tariffs have long been a key factor in rising car prices.
Samra Zulfiqar, a real estate analyst at Zameen.com, is passionate about finding projects that offer buyers the best returns. Her keen insights spotlight the market’s most promising opportunities.
