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Clothing exports take massive hit
17 Dec '09
2 min read
Laos, a land-locked country sandwiched between China, Vietnam, Cambodia and Thailand has a thriving garment manufacturing sector, though not as big as its neighbouring countries. But in recent times, the impact of the economic slowdown has left its mark on this sector.
Exports of clothing are expected to touch only US $160 million in the current year, down by $35 million when compared with the previous year, considering that shipments till the first nine months of 2009 could reach only $120 million.
83 percent of exports from the sector are destined for the countries in the European Union. Among other challenges, the strengthening of the domestic currency is considered a major drawback by the apparel exporters of the country.
The President of the Garment Factory Association, Onesy Boudsivongsack has appealed to the government to reconsider the value of the Lao currency; otherwise shipments from the sector could suffer and also lead to closures of a number of factories.
He also expressed concerns over the implementation of the value-added tax which will be put into effect from Jan 1, 2010 and said that the tax will create more difficulties to garment producers.
The Ministry of Finance, however argues that the valued-added tax is an additional major source of revenue for the government and that the government has lost 36 billion kip, by postponing the VAT introduction till early 2010.
Exports of clothing are expected to touch only US $160 million in the current year, down by $35 million when compared with the previous year, considering that shipments till the first nine months of 2009 could reach only $120 million.
83 percent of exports from the sector are destined for the countries in the European Union. Among other challenges, the strengthening of the domestic currency is considered a major drawback by the apparel exporters of the country.
The President of the Garment Factory Association, Onesy Boudsivongsack has appealed to the government to reconsider the value of the Lao currency; otherwise shipments from the sector could suffer and also lead to closures of a number of factories.
He also expressed concerns over the implementation of the value-added tax which will be put into effect from Jan 1, 2010 and said that the tax will create more difficulties to garment producers.
The Ministry of Finance, however argues that the valued-added tax is an additional major source of revenue for the government and that the government has lost 36 billion kip, by postponing the VAT introduction till early 2010.
Fibre2fashion News Desk - India
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