‘Govt needs to complement Customs tariff reforms with governance reforms’

FBR Member Customs (Operations) Shakeel Shah told a discussion in Islamabad on Friday that the government must pair Customs tariff reforms with governance reforms to make local industry competitive. The session, titled Pakistan's Tariff Reform and the Road to 2030, was organised by the Revenue Mobilisation, Investment and Trade Programme. Shah argued that the country's growth model has long depended on revenue and protection, and that a move toward productivity, competition and exports will create winners and losers. Business Recorder reported his remarks.

Shah warned that when the economy grows, imports come under pressure because exports have not kept pace, and the country then enters another stabilisation programme within two to three years. He also proposed doing away with income tax levied at the point of import, to lighten the burden on factories. Economist Dr Vaqar Ahmed added that tariff reform delivers its benefits only when applied consistently, without favouring particular sectors.

Industry representatives raised concerns. Zafar Mehmood, chief executive of NIMIR Chemicals, opposed a cut in the Customs duty bracket from 20 to 15 percent and warned that the sector would not survive the rollout of the National Tariff Policy by 2030. Wajid Bukhari of the Pakistan Association of Large Steel Production said the policy had a positive effect on industry during its first two years, but expected that effect to turn neutral in the third.