Teka Gebreyesus, State Minister of Trade and Industry, said stated that the tax imposed on the export of semi-finished leather products has a seriously deterring effect on the sector. Mentioning that the tax was “high”, he said the government has decided to lift the tax on the export of pickled, white blue and crest products in an effort to rescue the sector.
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Berhanu Abate, President of the Ethiopian Raw Hides and Skin Suppliers’ Association, for his part, noted that although Ethiopian hides and skin are most preferred, high taxation had been hazardous to the sector’s performance. Mr. Berhanu said up to 80 percent of hide and skin traders withdrew from the industry discouraged by the high tax rate. Out of 17 leather processers, five have shut down while eleven get by producing much below their capacity, he added.
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Highlighting that Ethiopia attracted no foreign direct investment (FDI) in the sector during the past seven years in spite of the “untapped potential” the sector has, Mr. Berhanu noted, the government’s decision to lift the tax will help address challenges.
To boost the productivity and export of the sector, Ethiopia is currently working to establish a Leather City Park at Modjo, it was learned.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
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Source: The Ethiopian He