LAHORE:

Stakeholders in Pakistan’s growing coffee sector are urging the government to eliminate the 28% combined Regulatory Duty (RD) and Additional Customs Duty (ACD) on bulk instant coffee imports, arguing the current levy is stifling industry growth and preventing the development of a domestic coffee market. The duties were imposed in June 2021 under SRO 840(I)/2021 and currently include a 15% RD and 2% ACD, with other charges making up the rest.

Industry sources point to the disparity between coffee and tea imports, which face only a 13% duty. They also note that the tariff on raw instant coffee is disproportionately high compared to finished coffee products, which attract duties between 42% and 53%.

According to industry representatives, this duty regime contradicts Pakistan’s National Tariff Policy, which emphasises policy predictability, value addition, and industrial efficiency. They argue that eliminating the duties would significantly lower the landed cost of bulk instant coffee, making local manufacturing more feasible and encouraging investment in domestic processing, blending, and packaging facilities.

With rising demand for coffee — driven by remote work trends and a flourishing café culture — stakeholders believe that lower raw material costs would also help bring down consumer prices and make coffee more accessible across homes and offices nationwide.

They add that reducing duties would streamline the coffee supply chain, cut administrative costs, and offer consumers a wider variety of products at more competitive prices. Industry players see strong potential in exports, saying local producers could create value-added instant coffee and ready-to-drink beverages for international markets.