The East African Community (EAC) has agreed to a three-year tax waiver of duties and value added tax on textile raw materials, fabrics and accessories that are not available locally.This step is expected to reduce the cost of production and also boost local manufacturing.The six-nation East African Community comprises Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda.

The EAC will now shift to a four-band tariff structure for cotton, textiles and apparels to promote cotton yarn and fabric production. While imported raw materials not available in the region would attract zero duty, intermediate inputs would be taxed at ten per cent, fabrics at 25 per cent, and readymade garments at 40 per cent.

The EAC has also agreed to adopt a three-year strategy for a gradual phase out of used clothing and shoe imports. This will be done through increased tax on these products and categorisation of products per bale of imports.

The partner states have also decided to establish cotton lint banks to ensure availability of cotton lint for spinning mills and downstream value addition.

All partner states producing cotton lint will set a target of at least 30 per cent local value addition to domestic cotton lint. This threshold would be increased to 50 per cent within five years.