The Federal Board of Revenue (FBR) has issued two notifications, SRO.1151(I)/2025 and SRO.1152(I)/2025, announcing a major reduction in Additional Customs Duties (ACDs) and Regulatory Duties (RDs) on a long list of imported goods. According to reports, the move falls under the tariff rationalisation plan and went into effect at the start of fiscal year (FY) 2025-26.

 

Reports reveal that ACDs will now be charged at a reduced rate of two percent on items falling under the 15 percent customs duty slab. The same rate applies to goods imported under SRO.655(I)/2006 and SRO.656(I)/2006.

 

The two percent ACD will also apply to cars, jeeps, and light commercial vehicles in Completely Knocked Down (CKD) condition above 1,000 cc. Meanwhile, a six percent ACD will apply to the import of goods under the 30 percent slab and other high or specific rate slabs.

 

Reports reveal that a number of ACD exemptions have been introduced under SRO.1151. These exemptions include the import of plant and machinery falling under Chapters 84 and 85, and goods that fall under Chapter 99 of the first Schedule of the Customs Act. 

 

Items brought in under baggage rules or the ‘Temporary Importation Scheme’ are reportedly exempt, along with various imported goods covered by older SROs like 577(I)/2005, 565(I)/2006, and 693(I)/2006. It merits a mention that the FBR has removed all ACDs on the import of CKD automobiles up to 1,000cc and completely built-up (CBU) vehicles.

 

The FBR intends to reduce the RD rate from 90 percent to 50 percent. However, reports indicate that the drop in RD will be carried out in phases over a period of five years. 

 

Moreover, reports suggest that duties have been completely removed on 554 raw materials and intermediate goods, while another 602 items will see reduced rates. However, a five percent RD will remain on CKD/SKD kits of home appliances, unless otherwise specified.

 

Islamabad intends to slash the overall average tariff from a whopping 20.19 percent to just 9.7 percent over five years. Reports reveal that all ACDs are expected to be phased out in four years, and that RDs will be eliminated completely within five years.