The new national tariff policy approved by the federal cabinet on Tuesday is a milestone in the national economic policy paradigm as it recognizes the importance of employing import tariffs for industrial development and export growth. The country’s first-ever national tariff policy is aimed at to remove anomalies in import duties structure and use it as an instrument to catalyze industrial production and for export growth.
The National Tariff Policy aims at removing anomalies in the tariff structure and making it a reflection of trade policy priorities and enhancement of competitiveness through duty-free access to imported raw material and promotion of investment in efficient industries through a predictable tariff structure.
The policy is based on the principles of employing tariffs as an instrument of trade policy rather than revenue generation and maintaining vertical consistency through cascading tariff structures . The policy will also provide time-bound strategic protection to the domestic industry during the infancy phase and also promote competitive import substitution through time-bound protection, which will be phased out to make the industry eventually competitive for export-oriented production. The guidelines contained in the tariff policy provide that tariff slabs will be simplified based on the principle of cascading tariffs on raw material, intermediate and capital goods will be gradually reduced and additional customs duty and regulatory duties will also be gradually slashed.
Under the policy, the difference in rates of tariff for the commercial importers and industrial users of raw material, intermediate and capital goods will be eliminated to provide a level playing field for small and medium enterprises through competitive access to essential raw material. The nascent industry will also be provided with time-bound protection, which will cover the payback period. The new national tariff policy will help development of industries in the country that will help improve the exports thus reducing the trade deficit to a greater extent.