Kenya keen to keep export tax on hides and skins - leatherbiz: Leading Leatherbiz

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Kenya keen to keep export tax on hides and skins

09/11/2010
The Leather Development Centre (LDC), part of the Kenyan Industrial Research and Development Institute, has said that a proposed free trade agreement between the African country and the European Union could represent a threat to progress that the leather industry has made there in recent years.

According to the centre, the EU’s commitment to free trade could put export taxes on hides and skins from Kenya under threat. The taxes, which have been in place since 2006 (initially at 20%, quickly rising to 40%), have encouraged companies in Kenya to process the raw materials at least to wet blue stage. The LDC has said that processing to wet blue stage adds 80% to the value of raw hides and skins, moving to crust adds 200% and to finished leather 400%.

The LDC believes the policy has been successful. In the year after introducing the 40% export tax rate on raw hides and skins, Kenya’s leather exports rose 54%. Now, nearly 98% of skins produced in the country (and 96% of hides) are processed at least to wet blue compared to 56% in 2004.


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