The Federal Board of Revenue (FBR) has abolished Additional Customs Duty (ACD) on imports falling within the 0%, 5%, and 10% customs duty slabs, effective from July 1, 2025. In parallel, it has also reduced Regulatory Duty (RD) on 1,022 tariff lines through two separate notifications issued on Tuesday.
These reforms form part of the federal government’s broader implementation of the National Tariff Policy 2025–30, which aims to streamline Pakistan’s import tariff structure. The policy, led by the Ministry of Commerce, targets the phased elimination of ACD over four years, complete removal of RD in five years, withdrawal of customs duty exemptions under the Fifth Schedule in five years, and reduction in the number of customs duty slabs from five to four (0%, 5%, 10%, and 15%).
According to the FBR, the reform measures are intended to simplify the duty regime, lower input costs for domestic industries, and enhance trade facilitation. By removing or reducing duties on raw materials and intermediate goods, the government aims to create a more predictable and transparent tariff environment conducive to industrial competitiveness and export-led growth.
The changes to ACD have been made under SRO 1151(I)/2025, which supersedes the earlier SRO 929(I)/2024. Under the new rules, goods previously subject to 0%, 5%, and 10% customs duties will no longer be subject to ACD—except for select tariff lines that will continue to attract a 2% ACD. For items under the 15% customs duty slab, ACD has been reduced from 4% to 2%. Similarly, items under the 20% slab now face ACD rates of 4%, 2%, or 0%, down from 6%. For items with customs duties above 20%, ACD has been lowered from 7% to 6%.
FBR officials stated that these adjustments are expected to lower the cost of doing business, particularly for industries reliant on capital goods and intermediate inputs, including those focused on import substitution and export generation.
The revised RD regime has been introduced through SRO 1152(I)/2025, affecting 1,022 PCT (Pakistan Customs Tariff) codes. The new structure includes a significant reduction—by 50% or 20%—on nearly 1,000 of these codes, particularly for industrial and semi-finished goods. The maximum RD rate has also been reduced from 90% to 50%, aligning Pakistan’s tariffs more closely with international trade standards.
However, RD has been retained at current rates for over 900 PCT codes, mostly covering consumer goods produced locally. This step, according to officials, is intended to ensure continued protection for domestic manufacturers against cheaper imports.
The phased reforms reflect the government’s intent to balance the twin objectives of industrial development and fiscal prudence while facilitating global trade integration and competitiveness.
