To spur growth of local fashion and tailoring industry, a traders’ lobby group in Kenya has urged the government to waive duty on all textile material imports. Kenya Traders and Importers Association chairman Benson Mutahi said local players in the sector were at a disadvantage because they buy textiles with a 16 per cent value-added tax as well as a 25 per cent import duty making up 41 per cent in taxes.
Mutahi said Chinese clothes dealers were selling readymade clothes from Chinese factories cheaply and directly to Kenyans, thereby short-changing the taxman. Chinese dealers buy clothes from their factories where they enjoy 40 per cent tax rebates but when Kenyans go to buy clothes in China, we are made to buy through agents at a higher cost including taxes, he observed. This has made it difficult for local tailors and dressmakers to compete effectively against cheap imports.
However, the call is unlikely to sit well with local textile manufacturers, spinners and cotton growers in a bid to revive the ailing industry. A recent move by Treasury secretary Henry Rotich to encourage textile factories in the export processing zones (EPZs) to use 20 per cent window to sell their products in Kenya has also hit local clothes-making business. EPZ factories enjoy the 41 per cent tax rebate and now the government has allowed them to sell 20 per cent of their products locally. But since the Association cannot access EPZ factories, it has left dressmakers and tailors at the mercy of importers, he said.