Hides and skins traders across the country have renewed demands for a revised export duty on raw hides and skins in the East African market to safeguard their livelihoods.
The traders affiliated to the East Africa Hides and Skins Association said the current 80 per cent tax on raw hides and skins was punitive and added the prohibitive tax has hamstrung growth of cottage enterprises and called for a downward review to 20 per cent to allow their enterprises stay afloat.
Speaking after an Annual General Meeting in Nakuru on Saturday, the association`s chairperson Karuri Ngige said the traders will welcome a friendly tax regime that will open the subsector to more tanneries within the region in the spirit of free enterprise to allow competition, quality leather and expanded markets.
Karuri said the traders want chargeable tax calculated on the export value of local hides and skins rather than their total weight to allow growth of local cottage industries that depend on leather.
The government imposed the 80 per cent tax on hides and skins for export as a way of encouraging value addition on the raw animal products locally.
State department of trade officials have noted that most of the products exported in recent years have been either raw or wet blue leather that fail to attract premium prices on the competitive global market.
The state department of industrialization and the Kenya Leather Development Council have defended the tax saying it will help make the subsector competitive on the global market due to its high quality products.
Karuri argues that while the policy was noble, it has done very little to improve the Sh10 billion leather value chain that has up to 2 million players.
“The existing 14 tanneries across the country are entirely owned by foreign merchants who have increasingly edged local traders out of the market as the review provided leverage to rewarding external markets as opposed to local traders who initially supported the country`s economy,” Karuri said.
Due to poor animal husbandry among farmers locally, local tanneries have only been able to process 10 million hides and skins annually against a higher potential with low payments of Sh10per kilogram of five per cent of hides and skins delivered for processing.
In a survey conducted by the Kenya Leather Development Council in 2018, the sub sector`s resource base currently stands at 18 million cattle, 28 million goats,17 million sheep ,3 million camels,2 million donkeys and another 2 million pigs whose hides and skins are inferior and go to waste.
The traders say with the dwindled fortunes courtesy of the restrictive tax regime, just like other businesses now, hides and skins produced locally are rotting away in their stores and the future of millions of households that is dependent on the sub sector becomes increasingly bleak.
The 2013 economic survey indicates that the average demand for quality animal products locally and globally has been growing exponentially but of concern is participation of local players in enriching the hides and skin value chain to which sustainable livelihoods and quality products is owed.
By Anne Mwale/Dennis Rasto