ISLAMABAD: The country’s leading industrial magnates convened at the inaugural Industrial Advisory Council meeting on Thursday, aiming to overcome obstacles stifling industrial growth and to craft a strategic five-year plan to boost the export sector. Setting an ambitious target, they aim to elevate exports to $100 billion.

The prominent industrialists were invited to Islamabad for the first time in a decade to deliberate on the country’s shrinking industrial base and stagnant exports.

The meeting, chaired by Caretaker Commerce Minister Gohar Ejaz, served as a platform for these industrialists to share their insights and discuss potential industrial policy.

During the meeting, the industrialists identified three major issues undermining industrial growth and discouraging multinational companies and foreign direct investment.

The first challenge identified was the corporate sector’s burdensome income tax rate of 49 per cent, which the Federal Board of Revenue (FBR) has imposed primarily on the organised sector while failing to expand the tax base to encompass the substantial retail and wholesale sectors.

The participants noted that this heavy taxation on the organised sector is causing difficulties for existing industries and deterring further investments in the sector.

The second challenge highlighted was the prohibitively high interest rate of 22pc, which severely hampers efforts to expand the industrial base or manage working capital. This rate makes bank loans unaffordable for most businesses.

The third challenge discussed was the high energy cost for the industrial sector, particularly compared to regional countries. The current energy tariff for the export sector is 15 cents, notably higher than regional averages.

Published in Dawn, December 8th, 2023