Islamabad Chamber of Commerce and Industry (ICCI) has called upon the government to provide some tax incentives to manufacturing sector by slashing tax rates for boosting up the falling productivity of this sector.

Karim Aziz Malik, Vice President ICCI said that the manufacturing sector, which contributes 20% to the GDP, remained under pressure during the year 2009 while the cut in tax rate would facilitate it to recover fast and play an effective role in boosting the economic growth and exports.

He said the manufacturing sector (including textile) is the main contributor to the total reserves of the national kitty and is paying around 60% share in the overall tax revenue of the government. But several factors including prevailing law and order problems, massive power crisis, high power and gas prices and high mark-up etc. are affecting its performance.

He lamented that Pakistan has mostly been relying on manufacturing and exports of low value added textile based products. The result is a narrow export base with more than 55% contribution coming from textile products. Realizing the shift in world’s economic land-scope, Pakistan should create a strong and diversified export driven manufacturing base by focusing on modernizing and strengthening this sector.