New NTP to cut average tariffs to 7.2% by 2029

ISLAMABAD: In a bid to fulfil the IMF conditions, Pakistan has envisaged a National Tariff Policy (NTP) for five years (2025-29) to slash the average weighted tariff by almost 1 per cent in the upcoming budget.

With the implementation of newly envisaged NTP, it might lead to a decrease in prices of vehicles and other products in Pakistan. The NTP 2025-29 has been prepared and will be implemented from the budget for 2025-26. The overall weighted average tariff will be slashed from 10.6 per cent to 7.2 per cent in five-year period till 2029.

In the first year of implementation of the newly envisaged NTP after getting approval of the prime minister and federal cabinet, the average weighted tariff would be reduced by close to 1pc from the next budget for 2025-26.

When Special Assistant to the Prime Minister (SAPM) for Industries and Production Haroon Akhtar was contacted on Thursday, he said the National Tariff Policy was home-grown agenda in order to achieve export-led sustainable growth. He said that the average weighted tariff would be reduced in a synchronized and phased manner.

He was of the view that there were two viewpoints: one is to sticking to protectionism, and the second to opening up everything to implement a free market economy. The upcoming national tariff policy, he said, would adopt a balanced approach to achieve competitiveness and efficiency.

However, the sources said that the auto sector has broadly agreed to the rationalisation of tariffs but asked the government to ensure lending from the commercial banks for leasing of vehicles, and secondly to undertake measures for discouraging import of used cars. The auto sector production stood at 150,000 vehicles per annum but possessed the capacity to jack it up to 0.5 million. The tariff on vehicles hovered around 150 to 190pc.

There is another challenge facing the auto sector with increased numbers of Electric Vehicles as the government has envisaged 30pc of new vehicles to the EVs in five years and 50pc by 2030.

“This tariff reduction will give benefits to certain major sectors such as steel, textile, and engineering, etc. However, the government will adopt a gradual approach to avoid depletion of hard-earned dollars for averting a balance of payment crisis,” said the official.