The Islamabad Chamber of Commerce and Industry (ICCI) has requested that Pakistan’s government reduces taxes for the country’s manufacturing sector in an effort to increase production.
In reported comments, ICCI's vice president, Karim Aziz Malik, said that tax incentives could encourage a rapid recovery in manufacturing output, which fell by 8.2% in 2009. An increase in industrial production, he added, would also provoke a rise in exports and, consequently, stimulate economic growth in the country.
A tax reduction would also counteract other factors, such as higher energy prices and power supply problems, which have recently caused the sector various problems. While recognizing that the manufacturing sector contributed around 60% of the government’s total tax revenue, a fall in tax rates could, in the longer term, provide greater revenues as the sector recovers, it is argued.
In that regard, Karim Aziz Malik was of the opinion that Pakistan should encourage development away from the current low value-added products, such as textiles, towards modern and more diversified industrial products.
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