The federal government is going to abolish the Export Development Surcharge (EDS), a move widely welcomed by the export sector as critical relief at a time when rising input costs and regional competition continue to erode profitability.
Waqas Ghani Kukaswadia, Head of Research at JS Global Capital, commented:
“The removal of the Export Development Surcharge is a meaningful relief for exporters facing intense cost pressures. Although the direct fiscal burden of the surcharge was modest, its elimination sends a strong positive signal that policy is finally moving in the direction of export-led growth.
The real test now is follow-through. This step needs to be supported by broader trade facilitation measures and structural reforms that tangibly lower the cost of doing business — faster tax refunds, competitive energy pricing for exporters, and streamlined temporary importation procedures will determine whether this marks a genuine turning point for Pakistan’s export competitiveness.”
Export Development Surcharge imposed at 0.25% of the FOB value of exports, the EDS has been a longstanding grievance for exporters who argued it effectively taxed foreign exchange earnings at a time when margins were already under severe strain.
Industry sources indicate that the decision is part of an emerging package of export-supportive measures, with expectations building for additional steps such as phased reduction in minimum turnover tax and duty rationalization on imported raw materials in the near term.