A proposal by the East African Community’s (EAC) sectoral committee on trade to increase local production by increasing the tax paid on imported clothing to the highest band will harm Kenya’s textile industry.
The council requests that the standard external tariff (CET) levy on textiles be adjusted to the highest band under the EAC, 35 per cent.
The recommendations were brought forward at the council’s 38th extraordinary meeting, which was held in Kilimanjaro, Tanzania.
According to the council, the initiative aims to boost cotton output in the area and reduce overdependence on imports, which has hampered the sector’s development.
Kenya is a net importer of cotton and textiles since it produces less than 12 million square meters of woven fabric annually compared to a market need of over 171 million square meters.
Under the current three-band tariff system of the EAC, which went into effect on January 1, 2005, completed goods imported into the regional bloc are subject to a charge of 25%, intermediate goods to a tax of 10%, and raw materials to a duty of 0%.
According to regional media, the council also intends to expand the scope of the harmonized cotton, textile, and clothing goods covered by duty exemption to promote commerce among EAC member states.
To increase intra-EAC commerce, it wants the member states to set up a digital infrastructure to enable information exchange on cotton harvesting and lint trading.
The summit urged partner governments to embrace traditional clothing as an official costume at official occasions to promote the “Buy East Africa Build East Africa” project.
To help the region’s struggling leather sector, the panel suggested creating a leather industrial park with shared effluent treatment.
