ISLAMABAD: Prime Minister Shehbaz Sharif on Monday eliminated the 0.25 per cent Export Development Surcharge (EDS) to relieve exporters and boost Pakistan’s competitiveness on international markets.

The decision was made during a meeting, chaired by the prime minister, during which proposals from a dedicated working group were reviewed. Among the key recommendations was the removal of the EDS to ease pressure on the export sector and strengthen its global competitiveness.

An official announcement from the Prime Minister’s Secretariat said that the premier has directed the immediate abolition of the EDS imposed on domestic exports. He also directed the review of the Trade Development Authority of Pakistan for reforms and its revamp.

Earlier, the premier had constituted a dedicated Working Group on the Export Development Surcharge (EDS), led by convener Musadaq Zulqarnain. The group included private sector members Shahzad Saleem, Misbah Naqvi, Khurram Mukhtar, Arif Saeed, Ahmad Umair, and Sualeh Faruqi. State Minister for Finance Bilal Azhar Kiyani and Secretary Commerce Jawad Paul were also part of the group.

Directs EDF money must be spent on boosting competitiveness of Pakistani goods on world markets

The terms of reference (TORs) of the group were to evaluate the efficacy of existing projects under the Export Development Fund (EDF) and propose measures to enhance the competitiveness of Pakistan’s exporters. After extensive deliberations and consensus-building, the Working Group submitted its recommendations to the Prime Minister last week.

PM Shehbaz issued special directives for a third-party audit of the EDF for the past five years, in accordance with international standards. He emphasised that the fund must be utilised to enhance domestic exports, support related research and development, provide skill training to the sector’s workforce, and provide world-class facilities. He added that any irrelevant or unjustified use of the fund would not be tolerated.

It was also decided that an interim steering committee, led by the private sector, will be constituted to ensure that the Rs52 billion currently available in the EDF is allocated strictly to projects that directly contribute to export enhancement. The projects should be carried out solely for R&D and skill development, and no money should be spent on infrastructure.

The matter of excessive taxation on exports was also raised during the meeting. It was highlighted that the effective tax burden on exporters is currently much higher than on domestic businesses.

Another Working Group, under the convenorship of Shahzad Saleem, has already submitted its recommendations on the tax burden on the export sector.The premier also instructed that a competent private sector chairman be appointed to ensure the optimal use of the fund’s available resources.

He resolved to promote and market Pakistan’s export products worldwide. He emphasised that providing maximum support to industrialists to enhance domestic exports is one of the government’s top priorities.

Published in Dawn, November 25th, 2025