Govt approves differential tax rates on textiles import

01 Sep '11

1 min read

A study undertaken by the Ethiopian textile manufacturers in association with concerned Government bodies recommended that finished and semi-finished textile goods should be taxed differently, rather than subjecting all textile imports to a uniform tax rate of 35 percent. It suggested that there should be lower duty imposed on semi-finished goods as compared to that on finished items.

The study even proposed that the 10 percent excise duty levied on textile items imported from other countries should be rolled back.

The findings of the study were laid before the Government with recommendations to rollback the excise duty on textile imports and to subject finished and semi-finished goods to differential tax rates.

Following the study, the association of textile manufacturers as well as the Government arrived at a consensus that it was not proper to subject all textile goods to flat tax rate, as clothes do not constitute luxury items.

Subsequently, the Government granted its approval to the suggestion of taxing finished and semi-finished textile items at differential rates. However, it is still undecided on the exact rate of taxes to which these goods need to be subjected to.

Ethiopia annually imports textile goods and clothes worth around five billon birr.

Fibre2fashion News Desk - India

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