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ISLAMABAD, Jun 3 (APP):As tariff debates take center stage globally following a shift in the US administration, experts at a seminar called for sector-specific interventions to make Pakistan’s new tariff policy a success.
The seminar titled “Winners and Losers: Making Sense of Pakistan’s New Tariff Policy”, was organized by Sustainable Development Policy Institute (SDPI), said a press release issued here on Tuesday.
Muhammad Ashfaq, the Joint Secretary at the Ministry of Commerce, who unveiled details of the upcoming National Tariff Policy 2025–30, said tariff rationalization is now essential to stimulate exports, enhance manufacturing, and generate employment.
“Pakistani imports are twice its exports. Unless we align our tariff structure with trade realities, circular debt and revenue shortfalls will continue to undermine our growth,” he said, adding that new tariff policy that originally shelved due to the COVID-19 pandemic and 2022 floods, aims to gradually reduce import duties across the board. The responsibility for customs tariffs has also officially shifted from the Federal Board of Revenue (FBR) to the Ministry of Commerce, which now oversees the National Tariff Board, a structural change designed to bring policy coherence, he added.
Ashfaq projected that by 2029-30, federal tax revenue could reach Rs2.1 trillion, driven by increased sales tax collections and a rise in indirect taxation. He noted that while the import bill may rise initially, exports are expected to surge, along with job creation, i.e. one million new jobs during the policy’s implementation phase.
“Pakistan has also opened negotiations with the US Administration to review tariffs on its exports. Though the US is not pressing hard on trade barriers, its concern over trade surpluses makes tariff rationalization a mutual interest. No changes to Pakistan’s tariff policy are anticipated after the conclusion of bilateral talks,” he said.
SDPI Executive Director Dr Abid Qaiyum Suleri, in his opening remarks, opined that the topic, once a technical concern, has become a “household name,” which reflects its growing importance both globally and domestically.
For Pakistan, he said, the debate is particularly pressing as the country prepares its federal budget under the supervision of not one, but two International Monetary Fund (IMF) programmes.
“Pakistan needs to understand the reality of tariffs, the expectations of global partners, and the nation’s own economic needs,” Dr. Suleri emphasized.
He added that it was not the first time Pakistan has faced external economic pressures while preparing its budget; a similar situation occurred during the COVID-19 pandemic. However, the then government was not bound by formal commitments. This time, the stakes are higher, he said.
“The situation has changed significantly,” said Dr Suleri and added that “Under the IMF’s Resilience and Sustainability Facility (RSF) and other related programmes, Pakistan is now obligated to meet specific conditions, adding a layer of complexity to the upcoming budget.”
He noted that several pertinent questions, ranging from the sustainability of Pakistan’s current trade policies to the long-term impact of tariff reforms on economic growth and foreign investment, are being raised.
Usman Khan, Team and Investment Lead at REMITT Pakistan, urged caution, highlighting the historical pitfalls in Pakistan’s policy execution. “Tariff rationalization alone won’t unlock growth. Factors like climate vulnerability, export competitiveness, and sectoral integration must be addressed.”
Lauding the performance of IT sector, he said despite limited support, it has shown export growth. However, he pointed out that productivity remains a challenge, referencing Vietnam where exports rose without a corresponding increase in labour productivity.
Ali Khizar, a senior journalist, raised his concerns over the overall tax burden. “With General Sales Tax, Federal Excise Duty, and Income Tax already at the peak levels, can we truly reduce customs duties without worsening the fiscal stress?” He also noted the potential inflationary effects of currency depreciation and the challenge of sustaining foreign exchange reserves.
Dr Irfan Ahmad Chatha, Director CLD at SDPI, stressed the need for simplification of regulatory procedures and inter-ministerial coordination to minimize disruption and unlock long-term gains.