Kenyans will acquire new clothes at affordable prices after the exemption of garments and footwear bought from export processing zones (EPZ) from paying 16 per cent value added tax (VAT).
The government says the growth of EPZ in Kenya has been restricted by trade barriers and duty free imports from Common Market for Eastern and Southern Africa states.
Industrialisation secretary Adan Mohamed said the move by the Treasury would see Kenyans buy new clothes, such as jeans at less than Sh1,000 from the current Sh1,500 following the VAT exemption.
This, he hopes, will wean Kenyans from using second-hand clothes and shoes whose popularity has in large part led to the collapse of Kenya’s once robust textile companies, among them Rift Valley Textiles and Kisumu Cotton Mills.
Kenya imports around 100,000 metric tonnes of second-hand clothes, shoes and accessories a year from Western countries aided by their low prices.
“This is a good move by CS Rotich that will enable Kenyans to acquire new clothes at affordable rates and cut on second-hand clothes,” said Mr Mohamed.
He also noted that the duty exemption would create an additional 20 to 30 per cent jobs in Kenya’s textile industry.
Mr Mohamed said that Kenyans have been paying between 41-45 per cent duty to access goods from the EPZ, while the same items are sold cheaply outside Kenya as they do not attract taxes in the export market.
Source: Business Daily
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