Federal Cabinet Approves The First-ever National Tariff Policy

The federal cabinet has approved the first-ever National Tariff Policy (NTP) developed by the Commerce Division after extensive consultations with the stakeholders.


This marks a milestone in the national economic policy paradigm by recognizing the importance of using import tariffs for industrial development and export growth.

The policy will set the tariff to promote trade, particularly exports, rather than revenue generation.

According to the press release, The Prime Minister said that the import tariffs have been traditionally employed as a revenue generation tool, which has increased reliance on import tariffs for revenue collection. In accordance with the reform agenda of the government, the economic policy is now being realigned to leverage tariffs for industrial development.

The National Tariff Policy aims to remove the anomalies in the tariff structure to reflect trade policy priorities and enhance competitiveness through duty-free access to imported raw materials and promotion of investment into efficient industries through a predictable tariff structure, decided through an institutional mechanism.

The NTP is based on the principles of

  1. Employing tariffs as an instrument of trade policy rather than revenue generation.
  2. Maintaining vertical consistency through cascading tariff structures (increasing tariffs through the stages of processing for a product).
  3. Providing time-bound ‘strategic protection’ to the domestic industry during the initial phase.
  4. Promoting competitive import substitution through time-bound protection, which will be phased out to make the industry competitive for export-oriented production.

The policy guidelines contained in the NTP say that the tariff slabs will be simplified in a cascading manner: tariffs on raw materials, intermediate and capital goods will be gradually reduced and reducing additional customs duty and regulatory duties in the next step.

The difference in tariff rates for commercial importers and industrial users of raw materials, intermediate and capital goods will be eliminated to provide a level-playing field to the SMEs through competitive access to essential raw materials. The nascent industry will be provided time-bound protection, which will cover the payback period.

The policy will be implemented through a Tariff Policy Board (TPB) chaired by the Commerce Minister/Advisor, with Minister for Industries & Production, Secretary Finance, Secretary Revenue, Chairman FBR, Secretary Commerce, Secretary Board of Investment, and Chairman NTC as its members. A Tariff Policy Centre shall be created in the Ministry of Commerce, which will serve as the Secretariat of the TPB.


Abdul Razak Dawood, Commerce Advisor, stated that the NTP is a major achievement in the country’s economic policymaking since it will energize export growth, leading to rapid industrialization and import substitution through predictability in the tariff framework.

The detailed document of the new policy doesn’t mention of which sectors might be the winners or losers after this policy, but it clearly states that the power to set tariffs will be taken away from the FBR, which has used it more as a revenue increasing measure rather than promoting trade and exports.

 The draft policy is attached below
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  • F**k the policy. My Nov 19 bill is rated @ Rs 26.75/unit (all crap taxes and FPA inclusive). Isn’t this insane? Morons have no idea how they are killing people. Mr. Niazi won’t off course mind, he has lived off people through his entire life. Real victims are general public.

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