Kenyan govt ready to address problems of textile sector

18 Mar '14

2 min read

The Government of Kenya is ready to address problems affecting the textile and clothing industry of the country, Adan Mohamed, Cabinet Secretary for Industrialization and Enterprise Development, has said, reports Daily Nation.

During a visit to the Export Processing Zone (EPZ) at Athi River, Mr. Mohamed said the textile and garment industry has the potential to create more than 70,000 jobs in Kenya over the next three-year period.

He said Kenya should take advantage of the African Growth and Opportunities Act (AGOA) for the growth of the country’s textile and apparel sector.

He added that his office would work with the Ministry of Agriculture to increase the production of cotton, the main raw material for the textile and garment sector.

The EPZ at Athi River employs over 35,000 people in the garment sector. Companies operating in the EPZ enjoy various benefits, including exemption from payment of value-added tax and custom duties on imported raw materials, exemption from paying stamp duty plus exemption of corporate taxes for the first ten years from the date of the first sale.

However, the companies operating from the EPZ now want to sell in the domestic market, which may harm local manufacturing firms that do not enjoy special benefits, according to industry analysts.

Mr. Mohamed, during his visit, told entrepreneurs that they cannot avail both tax-free status in EPZ and opportunities meant for people outside the EPZ.

At present, manufacturers who want to sell their products in the domestic market have to pay 25 percent tax.

Fibre2fashion News Desk - India

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