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Tajik Govt to tax cotton exports
Apr '11
The Ministry of Energy and Industries (MoEI) stated that, the Tajikistan government proposes to subject raw cotton to temporary export duty imposition, in order to safeguard the interests of the local textile producers who are facing difficulties, due to dearth of the raw material.

For the purpose, a special working committee has been constituted which would devise a mechanism and describe the rate of export duty on the commodity. The committee would submit its proposal to the government for consideration in May, this year.

MoEI has recommended fixing the export duty on raw cotton at 20 percent. However, the government's decision in this regard would be final.

Furthermore, the working committee is also contemplating on the prospects of allowing an exemption to the local manufacturers from payment of a 10 percent duty on sale of raw cotton, as the high prices of cotton along with the tax burden, is affecting the competitiveness of the products of the domestic manufacturers.

Besides, the committee is also deliberating on altering the process for sale of cotton fibre in the country, which was formulated in 2008 and purportedly has become outdated and ineffective.

Local producers paid higher prices for buying cotton from the domestic market, as compared to the cotton exporters. The rise in prices which was aimed at reducing the debt burden of the cotton cultivators has proved detrimental to textile manufacturers in the country.

According to experts, imposing export duty on raw cotton is targeted at curbing the commodity price in the local market, and may positively lead to a reduction in its price.

The country, exported 17,895 tons of cotton fibre totalling to US $68.859 million during initial two months of the current year, as against exports of 21,390 tons of cotton fibre amounting to $27.895 million, during corresponding period last year.

Fibre2fashion News Desk - India

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