Customs Tariff Rationalization Under the National Tariff Policy 2025-30
A Policy Built to Lower Input Costs
The National Tariff Policy 2025-30 is a multi-year plan to simplify and reduce import tariffs, particularly on raw materials and intermediate goods. The Federal Budget 2026-27 implements another phase of this policy, cutting customs duty (CD) on input goods so domestic manufacturers can source cheaper inputs and become more competitive.
The Customs Duty Reductions
Under the Finance Act 2026, customs duty on input goods is rationalised across several bands:
| Previous CD | New CD | Approx. tariff lines |
|---|---|---|
| 20% | 15% or 10% | Part of the 92-line package |
| 15% or 10% | 10% or 5% | Part of the 92-line package |
| 5% | 0% | Part of the 92-line package |
In total, around 92 tariff lines see reductions, with the lowest band moving all the way to zero.
Why This Matters for Manufacturers
Customs duty on inputs is a direct cost that flows into the price of finished goods. Lowering it reduces production costs, supports exports, and can ease consumer prices. By bringing some 5% lines down to 0%, the policy removes friction entirely on selected inputs, encouraging local value addition rather than importing finished products.
A Cost Illustration
- An input previously dutied at 5% on a Rs 2,000,000 import carried Rs 100,000 in customs duty.
- Moved to 0%, that Rs 100,000 cost disappears.
- An input cut from 20% to 10% on the same value saves Rs 200,000.
The Bigger Reform Context
Tariff rationalization sits alongside other customs measures in Budget 2026-27, including reductions in Additional Customs Duty and a review of Regulatory Duty, plus faceless adjudication and enhanced enforcement. Together they signal a shift toward a simpler, more predictable tariff structure over the 2025-30 period.
How Zaffre Axon Helps You Capture the Savings
To benefit, importers must classify goods under the correct tariff lines and apply the updated rates. The Zaffre Axon procurement and finance modules let you maintain tariff codes, apply current duty rates to landed-cost calculations, and update those rates as each policy phase takes effect. Zaffretech configured this centrally so your costing reflects the latest tariffs without manual lookups, and Zaffre HRM keeps the same accuracy across the wider Zaffre platform.
Action Points for Importers
- Review the tariff lines relevant to your inputs.
- Confirm the new CD rate for each and update your landed-cost models.
- Reprice finished goods where input costs have fallen.
- Track future phases of the 2025-30 policy for further cuts.
The Takeaway
The National Tariff Policy 2025-30 is a structural effort to make local manufacturing more competitive. Budget 2026-27 delivers another instalment of cuts. Importers who keep their tariff data current will turn those cuts into real margin and pricing advantages.
References: Finance Act 2026 (Federal Budget 2026-27); National Tariff Policy 2025-30; Customs Act 1969; FBR.
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