Pakistan moves to cut red tape, tariffs in bid to jumpstart economy

Special Assistant to the Prime Minister (SAPM) on Industries and Production, Haroon Akhtar Khan, reaffirmed the government's resolve to push forward comprehensive economic reforms and revive industry while addressing the Pakistan Prosperity Forum 2025, hosted by the Policy Research Institute of Market Economy (PRIME) in Islamabad.

According to an official statement issued on Wednesday, the event, themed "Charting a New Path Toward Limited Government and Lower Taxes," gathered policymakers, economists, and business leaders to discuss economic freedom, private sector dynamism, and the role of limited government in shaping Pakistan's future. Khan said Pakistan was at a critical juncture where short-term measures must give way to long-term reforms. "Economic stability is not achieved by chance; it is built through consistency, credibility, and competence," he said, echoing Prime Minister Shehbaz Sharif's vision.

He outlined three key reform areas — tariff rationalisation, regulatory modernisation, and industrial revival — that form the backbone of the government's economic strategy.

Under the New National Tariff Policy, the government has simplified the tariff structure into four slabs — 0%, 5%, 10%, and 15% — while phasing out all Additional and Regulatory Duties. "We are making tariffs an engine of export-led growth rather than a barrier to trade," Khan said, noting the policy will save industries Rs175 billion annually.

He added that the new structure would help Pakistan shift from protectionism to competitiveness, promoting value addition and technology-intensive sectors such as artificial intelligence, electric vehicles, chemicals, and green technologies. "While some nations weaponise tariffs, Pakistan is rationalising them to build resilience and integrate into global value chains," he said.

Khan also detailed progress under the Regulatory Guillotine and Reform Initiative, executed through the Board of Investment. He said 465 regulatory simplifications had been delivered under three reform packages, saving businesses over Rs250 billion in compliance costs. "The Asaan Karobar Act 2025 will legally anchor these reforms," he added.

He unveiled the National Industrial Policy 2025, describing it as "a blueprint for national revival." Formulated after consultations with the SBP, SECP, FBR, and chambers of commerce, the policy aims to restore investor confidence, revive manufacturing, and link Pakistan to regional and global value chains.

To support struggling industries, Khan announced the Revival and Debt Resolution Framework for Sick Industrial Units, developed in collaboration with the SECP, State Bank, and Pakistan Banking Association. The framework, implemented through the National Industrial Revival Commission (NIRC), will help restructure non-performing assets and attract strategic partnerships.

He said the government was also improving energy and tax frameworks, including preferential power tariffs for high-tech industries such as EVs, batteries, and data centres, and plans to gradually phase out the super tax. "We are shifting from protectionism to productivity, from ad-hoc incentives to performance-based rewards," Khan said. "We are rebuilding the spirit of enterprise that once made Pakistan a rising industrial power."

Minister for Investment Qaiser Ahmed Sheikh said sustainable growth required structural reform and investor trust. He called the Asaan Karobar Act 2025 a "landmark step" to ensure that no agency imposes unnotified business conditions.