PAKISTAN’s exports are not increasing at a fast rate, perhaps because the authorities give incentives to traditional export sectors and restrict imports through tariff walls. We often overlook the link between imports and industry. The unintended consequences of imposing tariffs as a means of revenue collection have eroded our regulatory capacity to collect direct taxes.

In FY2022-23, import duties contributed 13 per cent towards overall FBR collection and some 24pc in indirect taxes, while 73pc of import duties were collected from just 15 product groups. Duties on petroleum products, iron and steel, vehicles and edible oil constitute almost 50pc of all customs duties. The narrow base of dutiable imports is also a reason for high tariff rates.

Our first National Tariff Policy (2019-24) marked a shift in revenue generation methods as tariffs became a tool for promoting trade and industrialisation. It was considered a step in the right direction as it intended to simplify the tariff structure. The NTP also aimed to provide time-bound strategic protection to domestic industries.

The NTP included all relevant stakeholders at a single decision-making forum, the National Tariff Board. This approach alter­­ed the balance between various stakeholders,........

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