Customs duty is not the barrier, GST is

A column in The Express Tribune, written by the chief executive of the Prime Institute think tank, offers an early assessment of the National Tariff Policy 2025-30 after one year. According to the writer, import-based revenue has shrunk to under 40% of total tax collection, down from more than half, even as imports and customs receipts grew and average tariffs fell. Provisional figures for the first quarter of fiscal year 2026-27 show goods exports reaching $8.42 billion, up 10.84% year on year from $7.59 billion.

The writer argues the real choice is not protection versus foreign competition, but whether duties keep varying by sector or move to a low, uniform regime. Selecting markets through different rates, the column says, obstructs competition, so producers ought to win through productivity, quality and exporting ability instead. A gradual transition may be needed, the writer adds, but the end point should stay visible.

The column also treats general sales tax, set at 18%, as a larger obstacle than customs duty, saying it gives an edge to the informal sector that pays none. It questions the cascading tariff structure, noting that the new policy lowers overall rates but keeps higher protection at later processing stages. Assembling imported parts behind tariff walls, as the failed mobile phone manufacturing policy showed, will not build competitiveness, the writer argues.