Prime Minister Shehbaz Sharif on Friday unveiled major tariff reforms, announcing that customs duty would be capped at a maximum of 15% and that additional customs and regulatory duties would be phased out in the next four to five years.

The prime minister, who chaired a meeting on National Tariff Policy, took this historic step by approving a gradual but significant reduction in import tariffs.

“This move is being considered a major milestone toward economic improvement that will enable export-led growth.

Besides, it will also encourage international investment, help create new job opportunities,“ according to a PM Office press release.

The prime minister directed that Additional Customs Duty (currently ranging from 2% to 7%) and Regulatory Duty (currently varying from 5% to 90%) be eliminated over the next four to five years.

Similarly, the Customs Duty will be capped at a maximum of 15% as currently, for some items, the rate exceeds even 100%. The number of duty slabs has also been reduced to four to ease legal complexities related to imports and provide a level playing field to various industries.

Prime Minister Shehbaz reiterated that his government was committed to developing a strong economy, creating employment opportunities, and doing away with inflation.

He said that after thorough consultations with national and international economic experts, a comprehensive plan for fundamental economic reforms had been formulated, and the decision to reduce customs duties was also part of those reforms.

The prime minister’s “historic decision” will open the economy to foreign investment and ensure that domestic industries have easy and affordable access to raw materials, intermediate goods, and capital equipment. Moreover, increased competitiveness will enable local industries to become more efficient and competitive, to assist in controlling inflation and stabilizing the national currency.

The prime minister viewed that tariff reduction would help stabilize the current account deficit and contribute to higher revenue collection, and also formed an implementation committee on the subject.

The meeting was attended by federal minister Jam Kamal Khan, Ahad Cheema, Muhammad Aurangzeb, and Ali Pervaiz Malik, Special Assistant to PM Haroon Akhtar, and senior officials of relevant departments.

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