Consistent implementation of Pakistan's five-year National Tariff Policy (NTP) under the IMF programme could help the country achieve export-led growth, but the risk of policy reversals around election cycles could undermine its potential, experts said. The UK Foreign, Commonwealth and Development Office-funded Revenue Mobilisation, Investment and Trade (REMIT) programme organised a panel discussion titled "Protection to Competition: Pakistan Tariff Reforms and the Road to 2030," which highlighted tensions between the government's tariff reform agenda and measures to protect domestic industries.
The discussion was hosted by journalist and anchorperson Fahd Hussain. The government's NTP for 2025-30 envisages a reduction in the weighted average tariff each year.
However, the Economic Coordination Committee (ECC) approved the imposition of Additional Customs Duty (ACD) on imported tyres and motorcycle parts, raising questions about the consistency of the government's approach. Dr. Robina Athar, a member of the Tariff Policy Board, strongly opposed the move, stating it should not have been made without board consultation.
She noted that the proposal should have been presented to the board before being submitted to the ECC, yet she and Dr. Manzoor were not informed. Federal Board of Revenue (FBR) Member Customs Shakeel Shah said Pakistan has pursued a growth model for decades that prioritised revenue generation and protection of domestic industries.
Rising imports have repeatedly triggered balance-of-payments crises, he said. Moving towards productivity, competition, and exports will create winners and losers, with far-reaching implications for investment, industry, and employment, he added.
Shah noted that tariff reforms must be accompanied by other measures, as high electricity tariffs have also increased the cost of doing business. "When economic growth picked up, pressure on imports increased because exports failed to keep pace, eventually forcing the country to return to stabilisation programmes.
The question is how to break this cycle," he said, also calling for the elimination of income tax collected at the import stage. Dr. Robina Athar said trade liberalisation has delivered positive results globally, including in neighbouring India.
While import substitution was the dominant policy in the 1970s and 1980s, India has since moved away from tariffs of 100-150 per cent towards lower rates. She noted that 43 per cent of FBR collections came through the import stage.
Citing a World Bank study, she said Pakistan's automobile sector earned profits of 50 per cent. She questioned why consumers preferred imported used cars if the quality of locally manufactured vehicles was comparable to Japanese cars.
Athar said five years would be sufficient for domestic industries to adjust to the reforms. Zain Mustafa of Rubatech Manufacturing, representing the automobile sector, said inconsistent policies had created uncertainty and disrupted business planning.
The NTP could not be imposed without considering its impact on manufacturers operating in Pakistan. While it was easy to call for investment abroad, local manufacturers did not have the same flexibility, he added.
Mustafa also questioned calls for greater exports, saying businesses that managed to export under the prevailing conditions deserved recognition.