KARACHI: Federal Minister for Finance and Revenue Muhammad Aurangzeb on Wednesday underscored the significance of sweeping tariff reforms built into the federal budget, calling them a structural economic shift aimed at making exports more competitive and lowering the cost of importing raw materials to support export-led growth.
The minister highlighted the development during a post-budget press conference after presenting the finance bill in the National Assembly a day earlier. The proposed federal budget for FY2025-26 includes a total outlay of Rs17.57 trillion ($62 billion), while promising a 4.2% growth target and a reduction in the fiscal deficit to 3.9% of GDP.
Aurangzeb told journalists in Islamabad the government had removed additional customs duties on 4,000 out of 7,000 total tariff lines and reduced base customs duties on 2,700 tariff lines. Of these, 2,000 tariff lines are directly linked to raw materials and intermediate goods used by exporters.
“This is a big reform that has not been done over the last 30 years,” he said, adding the objective was to lower production costs for exporters and enable them to better compete in international markets.
“We are going to fundamentally change the DNA of the economy so that when we go toward growth, we don’t get into a dollar situation, we don’t get into a balance of payments problem,” he said. “We can continue to grow at a certain pace, which is export-led.”
Defending the reforms against criticism that they may lower revenue, the minister argued the long-term gains for the export sector outweigh short-term fiscal concerns.
“If we want an export-led economy, these are the steps we must take,” he added.
Aurangzeb also emphasized new legislation and enforcement tools, saying they were going to be key in plugging leaks and ensuring compliance.
“We have laws and taxes,” he said, “but without enforcement, they don’t work — and that’s what we’re focused on this year.”
