Page 22 - CMA Journal (Sep-Oct 2025)

Focus Section
Focus Section

Pakistan’s Tariff Reforms: A Defining

Moment for Economic Transformation

Exclusively written by the Author for this issue of CMA Journal

The National Tariff Policy 2025–30 marks a major shift in their economies
Pakistan’s approach to trade and economic through outward-
development. The Prime Minister has called it a “relief oriented trade.
package for the people” that aims to make Pakistan “a Starting with Japan in
preferred destination for investment and trade in the the 1960s, and
region.” The Finance Minister has described it as followed by South
Pakistan’s “East Asia moment.” These are not just slogans; Korea, Singapore,
they signal a strategic shift in policy. If implemented and Taiwan, Malaysia,
sustained, tariff reform could reshape the country’s China, and Vietnam,
economic future. East Asia grew by
gradually liberalizing
The optimism draws on global experience. High tariffs
trade. These countries
hurt the poor most by raising the cost of essential goods.
focused on exports,
Countries that maintained protectionist regimes have
joined global value Dr. Manzoor Ahmad
remained poor. Those that opened their economies
chains, attracted
reduced poverty, boosted exports, and grew faster. Tariffs Member of PM's Steering
investment, and
are regressive, placing a heavier burden on lower-income Committee for the
achieved economies
households that spend a larger share on food and Implementation of the National
of scale. Competition
necessities. Lower tariffs reduce the cost of living, freeing Tariff Policy 2025-30 and a Member
spurred innovation
up income for health, education, and other priorities. of the Tariff Policy Board (TPB)
and productivity.
Referring to Pakistan’s “East Asia moment” reflects an Reforms were sequenced alongside tax changes, human
ambition to follow the path of countries that transformed capital development, and infrastructure investment. The
result was foreign exchange earnings, job creation,
poverty reduction, and a rise as global manufacturing
and technology hubs.
Pakistan attempted a similar path in the 1990s. Import
licensing was scrapped. Deregulation, privatization, and
exchange liberalization followed. Tariffs fell from over 80
percent to a 25% cap by 2002. Supported by IMF and World
Bank programs, this liberalization helped exports grow in
double digits and GDP rise by over 5%.
But the 2007–08 commodity and oil price shocks, along
with rising fiscal deficits, triggered a return to
protectionism. Over the next 17 years, Pakistan’s
competitiveness declined, export growth stalled, and per
capita income lagged behind regional peers.

20 ICMA’s Chartered Management Accountant, Sep-Oct 2025