The Pakistani government has formally introduced a comprehensive tax reduction package that will take effect in July 2025 and is expected to reduce inflation and increase affordability. The announcement includes major reductions in regulatory duties on cars, SIM cards, and a wide range of imported goods, offering welcome relief to consumers and businesses alike. This strategic decision is expected to curb price pressures, improve purchasing power, and stimulate market activity.
Auto Sector Gets a Big Boost
Some of the most important developments have occurred in the automobile industry. Minivans and other new and used cars are now subject to 10% regulatory duties, a one-third reduction from the previous rates. Importers and car buyers, especially those looking at family vehicles, are likely to benefit significantly.
More strikingly, imported SUVs will see a 44% drop in duty, bringing the total tax down to 50%. This move is expected to increase competition in the SUV market and potentially lower showroom prices for consumers.
SIM Card Duty Slightly Reduced
The tax cut also includes a minor but symbolic relief for telecom users. The regulatory duty on SIM cards has been reduced from 15% to 12%, making it marginally cheaper to purchase and activate new mobile connections. While modest, this step signals a pro-consumer approach in the digital and communications sector.
Lower Duties on Food Imports
Frozen Foods and Poultry Products:
Consumers will now pay less for several everyday food items Imports of chicken and fresh fish will only be subject to a 5% charge, while the duty on frozen fish has been reduced to 17.5%.
These reductions aim to stabilize local prices and support dietary variety, especially in urban households. The duty on bird eggs has also been cut from 15% to 10%, potentially reducing prices of poultry-derived products in markets.
Dairy Products See 50% Duty:
Cheese and yogurt – both widely consumed dairy items – will now attract 50% regulatory duty, significantly lower import costs and benefiting both consumers and food retailers.
Fruits, Nuts, and Pet Food Among Other Beneficiaries
For health-conscious and pet-loving consumers, the changes don’t stop at staples.
- Duties on dates, coconuts, cashews, and Brazilian nuts have dropped by up to 16%.
- Tropical fruits like figs, mangoes, guavas, papayas, avocados, and pineapples now carry 20% lower duties.
- The tariff on Apple imports has decreased from 45% to 36%.
Additionally, dog and cat food duties have been brought down from 45% to 40%, supporting pet owners with slightly lower expenses.
Tobacco and Beverage Products Also Affected
The new package includes 5% to 40% reductions in duties on tobacco products and instant coffee, marking a broader relaxation of import taxes across both luxury and essential goods.
Why This Matters: A Strategic Move Against Inflation
These widespread reductions in regulatory duties reflect the government’s attempt to tackle rising inflation, improve consumer access, and stabilize prices across critical sectors. With fuel prices high and general living costs climbing, this tax relief package could offer a timely reprieve for millions of citizens and stimulate both trade and domestic consumption.
