Government of Tanzania may grant Nida Textile Mills a Tsh22.5 billion ($18 million) tax exemption if latter exports 50 percent of its products, Finance Minister Zakhia Meghji stated.
However, an official from the Confederation of Tanzania Industries (CTI) warned the Government that the decision would bear negative impact on the industry.
If Government treats Nida like this, other industries will sure to demand such bounties, which would ruin economy of the country, he added.
CTI says the tax exemption could create unfair competition, introduce dumping as well as breaking up the East Africa Community Customs Union.
Nida has sought Ministry of Finance approval to grant zero percent import duty on extra-wide gray fabrics materials needed for company to operate its textile mill.
However, Meghji said that this move would create fairness for other local textile manufacturers, who fear that the exemption could open doors for cheap products into local markets.