Charter of the Economy Table 21.4: The Import Tariff Structure Number of Slabs Minimum Tariff (%) Maximum Tariff (%) Average Effective Rate of Protection* 1997-98 8 0 60 112 2007-08 7 0 35 65 2013-14 7 0 30 52 2018-19 4 0 20 33 * % difference in value-added at domestic prices compared to the value-added at world prices. Source: FBR The path of investment in the manufacturing sector is given in Table 21.5. The long-term growth rate is only 1 percent after 2000-01. With this sluggish path of new investment or balancing modernization and replacement(BMR), it is not surprising that the industrial sector has become less competitive. Also, the rate of capacity utilization has been rising. Consequently, there is only limited capacity available in the short-run for boosting output in a big way. Table 21.5: Growth of Investment, Capital Stock and Output of The Manufacturing Sector (Valued at constant prices of 2005-06) Annual Growth Rate(%) Investment Capital Stock Output Capacity Utilization 1999-2000 to 2004-05 7.0 4.5 10.2 5.7 2004-05 to 2009-10-7.3 4.2 4.1-0.1 2009-10 to 2014-15 0.5 0.9 3.7 3.2 2014-15 to 2019-20 4.5 1.7 2.8 1.1 2020-21 1.2-3.2 9.0 ­Long-Term Growth Rate(%) 0.9 3.0 5.2 2.8 Source: PBS Excessive Tax Burden The large-scale manufacturing sector has been the favorite target for taxation because of the domination of corporate entities and generally documented transactions. Further, much of the imported duty revenue is collected from manufactured goods imported, like petroleum products. Consequently, the distribution of tax revenues, both Federal and Provincial, is very biased. 67 percent of the revenue is from the industrial sector, 30 percent from services and 3 percent only from agriculture. The tax burden on industry is very high at almost five times as on the economy as a whole. 204