The Tanners Association of Kenya has said smuggling of hides and skins to China is costing governments in the East African Community (EAC) around US$30 million in lost tax each year, according to local media reports.
The chief executive of the Kenya Leather Development Authority, Dr Issack Noor, explained that the Kenyan government has increased export tax from 40% to 80% to encourage domestic value addition. This has increased smuggling, however, which is affecting tax revenue.
Kenya has made the leather industry a central part of its new five-year economic plan. It aims to create 50,000 new jobs in the sector and increase export revenue by $500 million by 2022. It also wants to grow domestic shoe production to 20 million pairs and establish 5,000 new cottage industries.
Information courtesy of Leatherbiz