Pakistan, strategically located in South Asia, plays a vital role in regional trade and global commerce. The country is one of the largest economies in the region, with a diverse mix of agricultural, industrial, and services sectors. Pakistan’s customs tariff structure is designed to regulate imports, protect domestic industries, and generate government revenue. As a member of the World Trade Organization (WTO), Pakistan adheres to international standards for trade facilitation and customs procedures but also applies its own tariff policies, particularly in areas that are critical for its economic development.
The country applies different tariff rates based on product categories, which are classified according to the Harmonized System (HS) codes. Additionally, Pakistan has preferential trade agreements with specific countries and regions, which result in lower tariffs for imports from those nations.
Custom Tariff Rates for Products Imported to Pakistan
Pakistan’s customs tariff structure is composed of ad valorem duties (based on the value of the goods), specific duties (based on the quantity, weight, or volume), and mixed duties (which combine both value and quantity criteria). The tariff rates are reviewed periodically to align with Pakistan’s economic goals and international trade obligations.
1. Agricultural Products
Pakistan’s agricultural sector is a cornerstone of its economy, but due to insufficient domestic production of certain items and a growing demand for food, the country imports significant quantities of agricultural products. The government levies import duties on many agricultural goods to protect local farmers and producers. However, there are also exceptions to support specific industries, such as the food processing sector.
Key Tariff Categories for Agricultural Products
- Cereals and Grains (HS Code 10)
- Tariff Rate: 10-20%
- Pakistan imports large quantities of wheat, rice, and maize to supplement domestic production. The tariff rates on cereals and grains range from 10% to 20%, depending on the product’s type and origin.
- Fruits and Vegetables (HS Code 07)
- Tariff Rate: 5-15%
- Fresh fruits and vegetables, including citrus fruits, apples, and tomatoes, are subject to import duties ranging between 5% and 15%. Pakistan’s local agricultural output is limited in certain seasons, making the import of these products crucial to meet consumer demand.
- Sugar (HS Code 17)
- Tariff Rate: 25-30%
- Imported sugar faces higher tariffs (typically between 25% and 30%) to protect local sugar production. However, Pakistan’s sugarcane industry struggles with inefficiencies, and at times, imports are necessary to meet demand.
- Livestock and Meat (HS Code 02)
- Tariff Rate: 0-40%
- Meat imports, especially beef and mutton, face tariffs between 0% and 40%. The tariffs vary based on the type of meat and the processing method, with imported chilled and frozen meats being taxed at higher rates to safeguard the local livestock sector.
Special Import Duties for Agricultural Products
- Imports from China
- As part of the China-Pakistan Free Trade Agreement (CPFTA), agricultural products imported from China, such as fruits, vegetables, and certain processed foods, benefit from reduced tariffs or exemptions.
- Imports from the European Union
- Under the Generalized Scheme of Preferences (GSP) granted by the EU, Pakistan receives preferential tariffs on various agricultural products like mangoes, citrus fruits, and other produce, which are vital to the country’s export economy.
2. Industrial Products
Pakistan is working to expand its industrial base and reduce reliance on imported industrial goods. However, the country still imports a wide range of industrial products, from machinery and equipment to chemicals and textiles. The tariff structure for industrial products aims to encourage local manufacturing while ensuring that industries have access to essential imported inputs.
Key Tariff Categories for Industrial Products
- Machinery and Equipment (HS Code 84)
- Tariff Rate: 5-15%
- Pakistan imports a wide variety of machinery, including agricultural machinery, industrial tools, and construction equipment. Tariffs on these products generally range from 5% to 15%, with some specialized machinery being exempt from duties to encourage technological advancement.
- Automobiles (HS Code 87)
- Tariff Rate: 10-50%
- Imported automobiles, including cars, trucks, and motorcycles, are subject to tariffs ranging from 10% to 50%. The higher tariff rates apply to fully assembled vehicles, while parts and components may face lower rates. The government encourages local vehicle production through higher tariffs on completely built units (CBUs).
- Textiles and Apparel (HS Code 50-63)
- Tariff Rate: 5-20%
- Pakistan’s textile sector is highly competitive on a global scale, and as such, the country imports certain raw materials and finished textiles. Imported fabrics and clothing products face tariffs ranging from 5% to 20%, depending on the material and whether the goods are finished or semi-finished.
- Chemicals and Pharmaceuticals (HS Code 29, 30)
- Tariff Rate: 0-15%
- Chemicals, including industrial chemicals and pharmaceuticals, are critical for Pakistan’s manufacturing and healthcare sectors. The tariffs on these products range from 0% to 15%, with pharmaceutical products often benefiting from reduced duties to ensure the affordability of medicines.
Special Import Duties for Industrial Products
- Imports from the United States
- Certain high-tech industrial products and machinery imported from the United States may benefit from reduced tariffs, especially under the Generalized System of Preferences (GSP+) agreement, which provides preferential treatment to countries that uphold certain international conventions on human rights, labor, and environmental protection.
- Imports from EFTA Countries
- Norway, Switzerland, Iceland, and Liechtenstein, members of the European Free Trade Association (EFTA), benefit from a Free Trade Agreement (FTA) with Pakistan, reducing tariffs on a wide range of industrial products, including machinery, electronics, and chemicals.
3. Consumer Goods
As a growing consumer market, Pakistan imports a variety of consumer goods, from electronics and apparel to luxury items and household products. While the government applies tariffs to safeguard domestic industries, consumer demand continues to drive imports in these categories.
Key Tariff Categories for Consumer Goods
- Electronics (HS Code 85)
- Tariff Rate: 5-20%
- Electronic products, such as televisions, mobile phones, and home appliances, are subject to tariffs ranging from 5% to 20%. The tariff rate is generally higher for high-end electronic products such as smartphones, while items like televisions and home appliances tend to attract lower rates.
- Clothing and Footwear (HS Code 61-64)
- Tariff Rate: 15-30%
- Imported clothing and footwear face tariffs between 15% and 30%, with the rates typically higher for luxury brands and items made from materials like leather. The textile and garment industry in Pakistan is one of the largest in the country, and the government aims to protect local manufacturers through these tariffs.
- Furniture and Household Goods (HS Code 94)
- Tariff Rate: 10-20%
- Furniture and household goods, including appliances and kitchenware, are subject to tariffs ranging from 10% to 20%. While Pakistan has a domestic furniture industry, certain high-end or specialized products are imported to meet consumer demand.
- Cosmetics and Personal Care (HS Code 33)
- Tariff Rate: 10-25%
- Imported cosmetics and personal care products face tariffs of 10% to 25%. The higher tariffs typically apply to luxury cosmetics and personal care items, while basic goods may have lower duties.
Special Import Duties for Consumer Goods
- Imports from China
- Pakistan has a growing trade relationship with China, and imports from China benefit from reduced tariffs under the China-Pakistan Free Trade Agreement (CPFTA). This includes consumer goods like electronics, clothing, and household products.
- Imports from the UAE
- The UAE is one of Pakistan’s largest trade partners, and many consumer goods imported from the UAE, including electronics and luxury items, benefit from preferential tariffs due to the strong bilateral trade relationship.
4. Raw Materials and Energy Products
Pakistan’s energy sector is heavily reliant on imported raw materials, particularly oil, coal, and gas, to meet the growing energy demands of the country. The customs tariff structure for energy products is designed to keep these imports at competitive rates while encouraging energy efficiency.
Key Tariff Categories for Raw Materials and Energy Products
- Crude Oil and Petroleum Products (HS Code 27)
- Tariff Rate: 0%
- As a major importer of oil, Pakistan does not apply any tariffs on crude oil. However, petroleum products such as refined oils and lubricants are subject to taxes, but these do not constitute import tariffs per se.
- Coal (HS Code 27)
- Tariff Rate: 0-5%
- Pakistan imports coal for use in power plants and industry. The tariffs on coal are relatively low, ranging from 0% to 5%, to ensure the competitiveness of Pakistan’s energy sector.
- Natural Gas (HS Code 2711)
- Tariff Rate: 0%
- Natural gas imports, mainly in the form of LNG (liquefied natural gas), are critical to Pakistan’s energy needs. The government does not impose tariffs on these products to facilitate energy supply.
- Metals and Mining Products (HS Code 72-83)
- Tariff Rate: 5-10%
- Pakistan imports various metals and mining products, including steel, iron ore, and non-ferrous metals. The tariff rate on these raw materials typically ranges from 5% to 10%, with some items subject to lower tariffs depending on domestic production capabilities.
Special Import Duties for Energy Products
- Imports from Saudi Arabia
- Saudi Arabia is one of Pakistan’s key energy suppliers, particularly for crude oil and petroleum products. Although crude oil imports are tariff-free, other energy-related products may have preferential treatment due to bilateral agreements.
- Imports from Russia
- Pakistan has recently started importing coal and oil from Russia, and certain energy products from Russia benefit from reduced tariffs under the ongoing trade arrangements between the two countries.
Country Facts
- Country Formal Name: Islamic Republic of Pakistan
- Capital City: Islamabad
- Three Largest Cities:
- Karachi
- Lahore
- Faisalabad
- Per Capita Income: Approx. $1,600 USD (2023 estimate)
- Population: Approx. 240 million
- Official Language: Urdu (national), English (official)
- Currency: Pakistani Rupee (PKR)
- Location: Located in South Asia, bordered by India to the east, Afghanistan and Iran to the west, China to the north, and the Arabian Sea to the south.
Geography, Economy, and Major Industries
Geography
Pakistan’s geography is diverse, with mountains in the north, fertile plains in the Punjab and Sindh regions, and a coastline along the Arabian Sea. The country is home to several rivers, including the Indus River, which is crucial for agriculture and water supply.
Economy
Pakistan’s economy is mixed, with a significant emphasis on agriculture, textiles, energy, and services. The country is heavily reliant on agriculture, but over the past few decades, industrial sectors like manufacturing, textiles, and services have expanded. Energy shortages and infrastructure challenges continue to affect economic growth, although the country remains one of the largest economies in South Asia.
Major Industries
- Agriculture: Pakistan is a major producer of cotton, rice, wheat, and sugarcane. The agricultural sector employs a large portion of the population.
- Textiles and Apparel: Pakistan is one of the largest exporters of textiles and garments, particularly to the U.S. and Europe.
- Energy: The energy sector, including oil, gas, and coal, is crucial for Pakistan’s industrial and economic activities.
- Services: The services sector, including banking, telecommunications, and IT, has grown significantly in recent years.
