NTC’s consultation workshop: New tariff policy envisages targets to reduce import tariff till FY 2023-24

January 24, 2020

ISLAMABAD: Pakistan’s new tariff policy has envisaged targets to slash down import tariff in gradual manner till fiscal year 2023-24 under which the duty slabs will be reduced from maximum 25...

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ISLAMABAD: Pakistan’s new tariff policy has envisaged targets to slash down import tariff in gradual manner till fiscal year 2023-24 under which the duty slabs will be reduced from maximum 25 to 15 percent and minimum slab from 3 percent to zero.

Under the envisaged tariff policy from 2019 to 2024, the National Tariff Commission (NTC) has targeted to reduce the maximum duty slab in the shape of custom duty (CD), additional customs duty (ACD) and regulatory duty (RD) from 25 to 15 percent, second slab from 19 percent to 10 percent, third slab 11 to 5 percent and fourth slab from 3 percent to zero.

“The tariff rationalisation will be done in gradual manner as we want to bring a paradigm shift in policy formulation where the tariff will not be used as tool for revenue generation but it will be used for removing distortions and increasing our stagnant exports,” the Chairperson NTC Robina Aather said while addressing consultation workshop with different industries arranged by NTC here on Thursday. The NTC Member Anjum Asad Amin also participated in the workshop and replied different questions raised by the stakeholders.

The different stakeholders including cement sector, shipping sector, paper board and glass industry asked the government to rationalise duty structure on raw materials, plant and machinery of their relevant sectors in a bid to reduce the cost of doing business.

Almost all sectors’ representatives demanded of the government to reduce cost of doing business in Pakistan as prices of electricity, gas and provincial taxes and levies were making them uncompetitive into international markets. When there will be no exportable surplus then how the export proceeds will be increased in Pakistan, they questioned.

They took stance that the industrial, investment and transportation/logistics policies should be unveiled then the tariff policy could play its role for making our industrial sector competitive in the world market and could fetch their due share in terms of boosting up exports.

Robina Aather said that there was co relations between reduced tariff and increased exports and cited empirical evidence by stating that the tariff were slashed down from 2000 to 2004 and then the exports went up. The de-industrialisation happened in Pakistan because of higher tariff as it increased cost of manufacturing.

In the past, she said, FBR used tariff as tool for revenue generation and Pakistan third highest tariff among 68 countries that consists of plethora of SROs and contradictions. Now under the new tariff policy objectives the NTC would get proposals from all stakeholders and then it would be presented before NTC Board having representation of all stakeholders including FBR, Ministry of Finance and others.

The Regulatory Duties (RDs) could be reduced with the approval of government while rationalisation of duty slabs would require approval of Parliament. She said that the NTC would finalise its tariff rationalisation plan till March 2020 that would be forwarded to government for incorporation into the upcoming budget for 2020-21.

She said that the NTC would recommend incremental and gradual approach for rationalising the duty slabs. When asked about why the NTC proposals were aimed at next budget as why it could not be incorporated before budget, she replied that the RDs could be reduced and recommendations would be forwarded to the government after holding consultations with all stakeholders.



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