ISLAMABAD: Important details regarding the upcoming federal budget 2026-27 negotiations between Pakistan and the International Monetary Fund (IMF) have come to light, pointing toward a likely reduction in import, regulatory, and customs duties on various items.
According to sources, the government is looking to decrease regulatory duty and additional customs duty on imported goods in the new fiscal plan, which may also lead to lower duties on imported vehicles.
A major focus of these proposed changes is to support local industries and boost exports. The tariff imposed on raw materials for the export industry is expected to face reductions, making hundreds of essential manufacturing inputs cheaper.
Additionally, the telecom sector is poised for relief with a possible reduction in taxes on 5G machinery and equipment. Following directives from the Prime Minister, the Ministry of Industry and Commerce has already prepared a draft of the National Tariff Policy, aligning these tariff reductions with IMF targets to ensure local industries can remain competitive globally.
The specific scale of these relief measures involves thousands of import categories. Sources indicate that additional customs duty may be reduced across 3,149 tariff lines of imported goods, while regulatory duty is likely to be cut on more than 1,900 tariff lines. Agriculture is also set to benefit, with expected tax cuts on imported raw materials, equipment, machinery, and parts that are not manufactured locally.
Furthermore, the government plans to eliminate the remaining 2 per cent additional customs duty on 518 tariff lines within the 15 per cent customs slab. For higher brackets, the additional customs duty on 2,166 lines under the 20 per cent slab may be halved from 4 per cent to 2 per cent.
Similarly, for 468 lines carrying a customs duty greater than 20 per cent, the additional customs duty is expected to drop from 6 per cent to 4 per cent.
Prospective relief is also on the cards for the green energy sector, with a potential reduction in additional customs duty on the machinery and equipment required to establish electric vehicle and electric bike manufacturing plants.
