The leather sector associations in Kenya have urged the government to remove the export duty imposed on raw hides and skins. The Kenyan government has earlier applied 80 per cent tax on export of items mentioned above to give a fillip to domestic traders and encourage value addition.
The East Africa Hides and Skins Association describes these taxes as punitive and prohibitive and has put forward the idea of slashing the current duty to 20 per cent. Association’s Chairperson Karuri Ngige underlined the thwarting impact of duty on the competitiveness of leather in global market and difficulty it is facing in staying afloat.
He further suggested the government to introduce a ‘friendly tax regime’ that can stimulate the number of tanneries in the region, in a clear sign of free entrepreneurship, allowing competition, and having a positive impact on the quality of products and the expansion of the markets.
However, the state department of industrialization and the Kenya Leather Development Council (KLDC) argue that the tax increases the competitiveness of the subsector through the commercialisation of high-quality products.
A similar call has been made by Tanners Association of Kenya to remove the 10 per cent export levy imposed on tanned and crust hides and skins. Leather business has been facing a decline due to uncompetitive prices. “What we produce locally should not have duty so that the market can be good for all traders. Let’s get a balanced market so that we encourage local traders,” said Robert Njoka, Chairman of the association.
A comprehensive hide and skins policies must be in place which Kenya Leather Development Council (KLDC) should suggest to the government in order to create a conducive environment for traders. Watch on smuggling out of hides to Nigeria was another issue highlighted by Njoka.
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