In its endeavour to boost ‘Made in Rwanda’ drive, the government has announced a tax exemption for imports of leather and textile raw materials. The decision was taken after consultation with local leather and textile manufacturers in the face of government’s policy to ban second-hand leather and footwear products. The decision was implemented on December 2.
Explaining this, Innocent Safari, the Permanent Secretary, Ministry of Trade, Industry and EAC Affairs (MINEACOM) said that the exemption applies to both import duties and value added tax (VAT). According to the ministry, local investors have been paying between 10 and 25 per cent on textile and leather raw materials.
So far this year, the government collected taxes worth Rwf17 billion from imported leather and textile raw materials. The tax exemption applies to local investors recognised by MINEACOM with no limitations on the quantity of leather and textile raw materials to be imported as the country seeks to satisfy the local market demands and export fine products abroad, the official explained. The exemption will not apply to imported finished products but on the importation of machines and raw materials used to make garments and leather products by local manufacturers.