Magufuli: Impose 100pc export tax on raw skins

Magufuli: Impose 100pc export tax on raw skins

IN efforts to encourage value addition in the leather industry, President John Magufuli has directed the Ministry of Livestock and Fisheries to impose 100 per cent export levy on raw hides and skins.

 He said that there was no need for local traders to export raw hides and skins if the country has factories with the capacity of processing the raw material.

Inaugurating a leather factory in Morogoro on Friday, President Magufuli expressed government commitment to protect and continue to create enabling environment for both local and foreign investors.

The factory - ACE Leather Tanzania Limited -- owned by former Igunga Member of Parliament and business tycoon Rostam Aziz -- is expected to generate 1,000 jobs.

He explained that since the country has factories to process raw hides and skins, exporting the raw material means sending out employment and revenue to those who will process them.

"The  issue of export  permit  for raw hides and skins  can  be resolved by the Ministry of Livestock and Fisheries ... you have said that the current export levy is 80 per cent... impose  100 per cent levy   and this will be the best way  to discourage  export  of  the raw material," Dr Magufuli  said.

On taxes, imposed on chemicals used in leather processing, Dr Magufuli said that the Ministry will work over the matter to see  the possibilities of scarping the charges.

“The Ministry of Industry and Trade should work on this ... you should only work on chemicals meant for leather factories. The country has more that 34 million cattle, and more than 21 million goats all these produce raw materials for our factories," Dr Magufuli said.

Earlier,  Mr Aziz told the President to consider reviewing policies governing the industry to increase efficiency of the factories.

"One of the reasons which caused most of the leather factories to fail is policies ...the most important thing which  majority of countries in the world  including Ethiopia  have done is  banned  export of unprocessed hides and skins," he said.

He assured the president that the factories currently available in the country have the capacity of processing all hides and skins produced in the country thus there was no need of exporting them.

Mr Aziz also asked the government to consider scrapping taxes on chemicals   used in processing leather to allow local factories to compete in the world market 

The Permanent Secretary in the Ministry of Livestock and Fisheries Development, Prof Elisante Ole Gabriel, said that Tanzania is ranked second in Africa for having largest population of livestock.

He said that   the current country's demand for shoes is 38 million pairs but the country produces only 1.2 million pairs of shoes.

The PS said that his ministry has taken various measures to improve the industry among others introduce new markers on livestock which does not affect the quality of hides and skins.

"We have conducted training to 1500 skinners and provide them with special knives for the work to ensure that we get quality raw materials," he said.


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