Shehbaz Sharif rolls out phased tariff reforms to boost exports, strengthen industrial growth

In a bid to support industrialisation efforts and export revenues, Prime Minister (PM) Shehbaz Sharif has decided to implement the National Tariff Policy by forming a senior advisory committee. According to reports, the tariff policy is to be implemented over a period of five years and is expected to significantly improve the domestic economy.

Reports indicate that the committee will include 10 senior officials, with Finance Minister Muhammad Aurangzeb at the helm. Notable figures on the committee include the ministers for Railways, National Food Security & Research, Commerce, and Petroleum.

Furthermore, renowned economist Dr Ijaz Nabi, along with former bureaucrats Dr Robina Athar and Manzoor Ahmed, are also part of the committee. The inclusion of economic experts along with bureaucrats may result in the committee gaining a wider array of perspectives as opposed to one entirely composed of lawmakers alone.

As per the notification, the committee is primarily responsible for leveraging tariffs to grow exports, come up with support schemes and outline different sectors that will be affected because of a revision in tariffs, among other duties.

Other responsibilities include providing oversight to the policy’s implementation, along with studying the economic figures associated with tariffs. Moreover, reports indicate that the committee will also attempt to bring in foreign direct investment inflows while simultaneously focusing on creating a surplus in the supply of industrial products.

While the surplus may not clear in the domestic market, experts believe that it could allow for a boost in exports, thereby generating export revenues for cash-strapped Pakistan.  This spells great news for the country as it has historically relied on remittances to stop the current account deficit from growing too large, a phenomenon caused by the country’s persistent trade deficits.

Reports reveal that the Ministry of Commerce (MoCOM) will have the authority to induct members onto the committee. The MoCOM has also been tasked with extending secretarial support to the committee upon request. 

PM Shehbaz has authorised a sizable drop in tariffs on imports, which could attract investments while boosting exports, as per details from an official announcement. He announced his intentions to create employment avenues by improving the economy.

Reports suggest that PM Shebaz has also implemented a 15 percent upper limit on customs duty, a move that could provide importers relief. Moreover, he waived off additional customs duty entirely, which can be as high as seven percent, along with regulatory duties, which can be as high as 90 percent. 

However, these reductions in tariffs and duties are to be implemented in phases. As per reports, it will take four to five years for importers to experience the full extent of tariff reductions.