Pakistan is following progressive policies of privatisation, deregulation and trade liberalisation. The reduction of barriers to trade in goods and services and overall liberalisation of the financial sector have caused a structural transformation in the economy.
The emphasis on the role of the government is now on the formulation of sound policies and good governance rather than on controls and direct management of the economy. The maximum tariff rate on imports has been brought down from 45 per cent to 35 per cent.
There are duty rates of 10 per cent, 15 per cent, 25 per cent and 35 per cent on raw materials, components and intermediates, sub-assemblies and finished goods.
The general sales tax (GST) on imports and im ported plant and machinery, as well as domestically-manufactured units, has also been abolished while GST on other items has been reduced to 12.5 per cent.
In Pakistan, no prior permission is needed for setting up any industry except for units of arms and ammunition, security printing, currency and mint, high explosives, radio-active substances and drinkable alcohol.
Full repatriation of capital, capital gains, profits and dividends is now allowed and foreign investment enjoys full protection under the law enacted by parliament.
