The Federal Board of Revenue (FBR) has rolled out a sweeping customs duty reform starting July 1, 2025, cutting import taxes on a wide range of goods including vehicles, food items, and manufacturing equipment. This move comes under the government’s long-term tariff rationalization plan aimed at easing inflationary pressure and boosting industrial growth.
Through SRO.1151(I)/2025 and SRO.1152(I)/2025, the FBR has slashed Regulatory Duties (RDs) on 1,022 items and updated Additional Customs Duties (ACDs) across various import categories. Notably, the new rules will exempt all items in the 0%, 5%, and 10% customs duty slabs from RDs, providing relief to both businesses and consumers.
For ACDs, a 2% duty will now apply to goods in the 15% tariff bracket, selected imports under old SROs (655, 656), and vehicles in CKD condition over 1,000cc. A 6% ACD will apply to items under the 30% slab and specific high-rate categories.
The FBR has granted key exemptions, including the import of plant and machinery, raw materials, small passenger vehicles, and offshore exploration equipment, ensuring industrial inputs remain affordable.
In a broader shift, Pakistan’s overall tariff structure will be trimmed from an average of 20.19% to just 9.7% over five years. Customs slabs will be simplified from five to four (0%, 5%, 10%, 15%), and all ACDs and RDs are set to be eliminated gradually by 2030.
For the auto industry, duty reductions will align with the Auto Industry Development and Export Policy (AIDEP), starting with phased ACD relief from July 2026.
This reform marks a critical step toward a more transparent, business-friendly trade regime—balancing consumer affordability with industrial competitiveness.
