Govt cuts regulatory, additional customs duties on imports from July 1

The federal government has reduced regulatory duties and additional customs duty on a wide range of imports from July 1, 2026, as part of the second-year tariff rationalisation plan under the National Tariff Policy 2025-30.

The Federal Board of Revenue (FBR) issued SRO 1064(I)/2026 on Tuesday, superseding Notification No. SRO 1152(I)/2025, to revise regulatory duty rates on imported items.

Under the notification, the maximum regulatory duty rate has been reduced from 50% and capped at 20%.

For items where existing regulatory duty rates are 20% or below, a standard reduction of 20% has been applied.

However, exceptions have been retained for tariff lines where regulatory duty rates are 5%, 2% and 1%, particularly where the items are linked to exports or local production.

The government plans to gradually eliminate regulatory duties by 2030 under the National Tariff Policy 2025-30.

The policy aims to simplify the tariff structure, reduce import barriers and improve competitiveness.

Under the second-year tariff rationalisation plan, the government has also incorporated adjustments in regulatory duty rates of 1%, 2% and 2.5%. During the second year of implementation, the maximum regulatory duty will remain capped at 20%.

Separately, the FBR issued SRO 1063(I)/2026, superseding Notification No. SRO 1151(I)/2025, to reduce additional customs duty on the import of inputs, raw materials and other goods.

The additional customs duty slabs have been reduced from 6% to 4%, 4% to 2%, and 2% to zero.

However, the government has retained the 2% additional customs duty rate where the customs duty rate is specific, including zero% and 5% customs duty categories.

The FBR has also notified the procedure for collecting Special Excise Duty on imported vehicles through SRO 1072(I)/2026.

The Finance Act 2026 has imposed Special Excise Duty at the import stage on vehicles specified in Table IA of the First Schedule to the Act.

According to the notification, Special Excise Duty on goods imported into Pakistan will be levied and collected in the same manner and at the same time as customs duty payable under the Customs Act, 1969.

The provisions of the Customs Act, including Section 31A, will apply accordingly.

The notification will take effect from July 1, 2026.