Shoe makers oppose mitumba tax relief

June 27, 2012
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In his Budget Policy Statement on June 14, Githae said he had directed KRA to revert to the lower charge per container of imported second hand clothes/MAINA MWANGI

, NAIROBI, Kenya, Jun 27- The Kenya Footwear Manufacturers Association has expressed dissatisfaction with Finance Minster Njeru Githae’s move to reduce import duty on second hand clothing (mitumba).

The association’s secretary Simon Ng’ang’a said the reduction of import duty on a 20-foot container of second-hand clothes from Sh1.9 million to Sh1.1 million is affecting their business.

“The reduction of import duty on second-hand clothes is greatly affecting our business, a sector that has become a major employer with 100,000 direct jobs across the value chain and another 80,000 indirect jobs in the supply of accessories and services both in the formal and informal sectors,” Ng’ang’a said.

In his Budget Policy Statement on June 14, Githae said he had directed KRA to revert to the lower charge per container of imported second hand clothes.

The Minister noted that the increase in the charges had led to many mitumba traders – mostly the youth – to close businesses leading to unemployment and to make the clothings affordable to Kenyans.

The association is now urging the government to instead increase duty on mitumba clothing.

“We are urging the government to increase the import duty from Sh1.9 million to Sh3 million on the same container and increase duty on export of raw hides to between 80 percent and 100 percent,” he explained.

The increase of duty on the hides’ exportation will ensure retention of the key raw material of the manufacturers.

“We were ready to move to the next level and we are looking forward to the government to enhance the support measures as per the proposal made by Kenya Leather Development Council to the Treasury to be included in the budget statement was completely ignored,” he confirmed.

He claimed that it will be a great setback to the Vision 2030 goals.

“Loss of investor confidence will have a long term effect not only on the leather sector but other production sectors, is a sign of lack of proper government policy and this can result in capital flight. This will be setback in achieving our Kenya Vision 2030 goals,” he added.

Ng’ang’a said the value of finished product is twelve times the value of raw hide or skin capable of giving an annual Gross Domestic Product of Sh120 billion which will boost the countries revenue.

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