ISLAMABAD: In a major policy shift aimed at easing import costs, the government on Tuesday announced a significant reduction in regulatory duties on imported food items, vehicles, and personal care goods. This move is set to benefit international food chains, vehicle importers, and sugar millers, as well as consumers across the country.
The Federal Board of Revenue (FBR) issued a notification reducing duties on hundreds of imported items, with the changes approved by the federal cabinet through circulation. While duties on goods that could negatively impact local manufacturing remain largely unchanged, notable exceptions include reductions on cars and iron and steel products.
Effective July 1, the first day of the fiscal year 2025-26, prices of dog and cat food, cheese, and other consumer goods have decreased due to the lowered import duties. Additional customs duties were also slashed as part of a broader government plan to gradually abolish these charges over four to five years, a strategy supported by the International Monetary Fund (IMF) and World Bank.
The regulatory duty on mobile phone SIM cards was reduced from 15% to 12%, while duties on new cars and mini vans were cut by one-third to 10%. Used mini vans and SUVs also received duty reductions, with the duty on imported SUVs dropping 44% to 50%. Other items like sunglasses, wristwatches, perfumes, soaps, and makeup saw similar cuts.
Live poultry import duties were halved to 5%, while eggs, fresh fish, and various fruits and nuts also enjoyed reduced tariffs. However, duties on sugar confectionery remain high at 40% to protect local producers.
The government also lowered additional customs duties across numerous tariff lines, with cuts ranging from 2% to 6%, depending on the previous rate.
This policy adjustment follows earlier plans to reduce import duties on nearly 2,000 tariff lines by over 50% in five years, aiming to open markets and encourage competition, despite some resistance from local businesses and industry groups.
