Import duties on food, auto cut
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In a major policy shift, the government on Tuesday announced a significant reduction in restrictive regulatory duties on imported food, vehicles, and personal care goods. The decision benefits international food franchises and importers of new and old vehicles.
The Federal Board of Revenue (FBR) issued a notification reducing regulatory duties on hundreds of imported items. These changes were approved by the federal cabinet through circulation. However, duties on goods that could harm local manufacturing remain unchanged — except for cars and iron and steel.
Dog and cat food, cheese, and other consumer goods became cheaper starting July 1 — the first day of fiscal year 2025-26. In a separate notification, the government also slashed additional customs duties, which were previously used as a tool to extract more revenue.
The changes in the regulatory and additional customs duty are part of a broader government plan to abolish these duties over a period of four to five years. The International Monetary Fund (IMF) and World Bank support this strategy. The notification showed that international food chains will benefit the most, along with their local consumers.
Regulatory duty on mobile phone SIM cards was reduced from 15% to 12%. Duty on new cars and mini vans was cut by one-third to 10%.
Duty on used mini vans and sport utility vehicles (SUVs) was also reduced. The biggest relief was for imported SUVs, with a 44% cut — bringing the duty to 50%. Imported sunglasses and wristwatches have also become cheaper.
While a Rs10 per chicken federal excise duty has been imposed, the government has cut the import duty on live poultry.
Regulatory duty on live poultry and fresh or chilled fish (excluding fillets and meat) was halved to 5%. Duty on birds' eggs was lowered from 15% to 10%, and on imported vegetables to 5%.
Instant coffee in retail packs saw a one-fifth cut, bringing the duty down to 32%.
Dog and cat food now carries 40% duty, also a one-fifth reduction. Tobacco (stemmed or stripped) was cut to 40%.
Duty on coconuts, Brazil nuts, and cashews dropped to 16%. Dates, figs, pineapples, avocados, guavas, and mangoes now carry 20% dutya one-fourth cut. Duty on oranges is now 12%. Duty on papaws and apples dropped from 45% to 36%. Other nuts saw a 4% cut in regulatory duty.
However, the duty on sugar confectionery remains at 40% to protect local millers. Duty on potatoes fell from 55% to 44%. Pineapples are now taxed at 40%.
Duty on frozen fish is halved to 17.5%. Cheese and curd imports now face 40% duty — a 10% cut.
Duty on imported milk, cream, and yogurt dropped from 25% to 20%. Natural honey is taxed at 24%, down from 30%. Duty on edible insects and animal-based products is now 5%. Ware potatoes are taxed at 20%, down from 25%.
Perfumes, toilet waters, and makeup preparations saw a one-fifth duty cut, now taxed at 44%. Shaving preparations are at 40%. Soaps have also become cheaper.
Leather and imitation leather clothing and accessories now face 40% duty. Cigarette paper is taxed at 24% — a 20% reduction.
Woven fabrics made from high-tenacity nylon, polyamides, or polyesters now carry just 1% duty. Various ceramics also saw cuts, reducing construction costs.
Imitation jewellery is now taxed at 36%, benefiting consumers.
Semi-finished iron or non-alloy steel has a new duty of 12%. Flat-rolled steel (600mm+ wide, hot-rolled) now has a duty of 2.5%, cut by half. Door locks also saw a 50% reduction to 2.5%.
TV remote controls now carry half the previous duty. Chandeliers saw a rate drop to 32%. Video game consoles and machines now have 40% duty.
The government also reduced additional customs duties across hundreds of tariff lines.
Items under the 15% tariff slab now carry 2% lower additional duty. Those under the 20% slab saw a 4% cut. Goods under the 30% and higher slabs, or with specific rates, saw a 6% reduction.
Earlier, the government had decided to abolish or substantially cut regulatory duties on 1,984 tariff lines. The move aimed to reduce protection for local industries by 52% over five years.
After pushback from the business community and within the cabinet, 285 of those lines were revised again. The original plan targeted raw materials and semi-finished goods. However, finished goods — also produced locally — were also included in the cuts.
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