The Islamabad Chamber of Commerce & Industry said that government was reportedly considering to withdraw zero-rating facility to 5 export-oriented industries including textiles, leather, carpets, surgical instruments and sports goods and further enhance sales tax in forthcoming budget in order to improve tax revenue, which was not a good move and urged that government should avoid taking any such measures as it would enhance cost of doing business, further squeeze exports and discourage new investment in manufacturing sector.
Ahmed Hassan Moughal President, Rafat Farid Senior Vice President and Iftikhar Anwar Sethi Vice President, Islamabad Chamber of Commerce & Industry said that due to lack of good incentives, investment in manufacturing sector has witnessed a decrease over the last decade, which was one of the major causes of Pakistan’s current economic problems. They said that due to declining investment in manufacturing sector, its share in country’s GDP has come down to 12.1 percent in 2018 from 14.8 percent in 2008 showing slump in industrialization and jobs creation.
Ahmed Hassan Moughal said that declining investment in manufacturing sector has also taken a toll on exports, which was evident from the fact that our exports were just 8.5 percent of GDP as compared to 88.6 percent for Vietnam, 21.9 percent for Sri Lanka, 14.4 percent for Bangladesh and 11.9 percent for India.
ICCI President said that due to better export policies, India has enhanced its exports from just $59 billion in 2003 to $296 billion by 2017 while exports of Vietnam during that period have surged from $20 billion to 214 billion, Bangladesh’s from $6 billion to $41 billion but Pakistan’s from $10 billion to just $22 billion, which showed the poor performance of our export sector. He urged that government should learn a lesson from other countries and come up with attractive incentives in the new budget for export sector to encourage new investment in this important sector that would go a long way in improving country’s exports, creating new jobs, promoting industrialization and improving country’s tax revenue.