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High taxes on inputs hurt Turkish apparel exports

27
Dec '11
The competitiveness of Turkish apparel exporters is being affected by a recent increase in taxes on raw materials, according to top officials of various retail associations.

Through a new regulation in June this year, the Turkish Government imposed an additional tax of 20 percent on import of textile products into the country, excluding imports from the EU.

At a meeting on Ready-to-wear held in Istanbul, Mr. Yilmaz Yilmaz, Chief of United Brands Association, said the prices of fabrics have gone up by 20 percent, which has increased the total costs by 30 percent over November 2010 prices.

He added that the levy of additional tax since June this year has led to a loss of around US$ 700 million in apparel exports during the last four months.

He said the increasing costs will also lead to a rise in domestic consumer prices, which, in turn, will impact the rate of inflation during the early part of next year.

Mr. Yilmaz revealed that the prices of cotton account for a 55 percent share in the general cost of production.

Mr. Hikmet Tanriverdi of the Istanbul Ready-to-Wear and Apparel Exporters' Association (IHKIB) said the additional 20 percent tax on import of textile products, excluding imports from EU countries was intended towards decreasing the country's current account deficit.

He revealed that the volume of purchase by international buyers has declined since the imposition of additional taxes and the country will fail to meet its apparel exports target of US$ 17 billion set for this year, and would close the year at US$ 16 billion in apparel exports.

Turkey imported fabric worth US$ 2.1 billion during January-October period of 2011.

Turkey's apparel imports have a 1 percent share in the country's total imports, while its apparel exports constitute 13 percent of the country's overall exports.

Fibre2fashion News Desk - India


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