Skin factories: Ministry proposes sharp tax cuts

14Apr 2021
James Kandoya
Dar es Salaam
The Guardian
Skin factories: Ministry proposes sharp tax cuts

​​​​​​​POLICY shift is evident at the Ministry of Livestock and Fisheries as it is seeking a 50 per cent tax cut on imported leather processing machines as part of efforts to rescue large parts of 98 per cent of skins that go to waste due to poor quality.

Minister Mashimba Ndaki.

Speaking to The Guardian in an interview yesterday, minister Mashimba Ndaki said the ministry has already reached out to the Treasury to slash the specific taxes by half to enable more Tanzanians to set up skin processing factories.

“There are few such machines in the country due to tax added costs. Iit is our hope that by cutting taxes by half many people will afford the machines and improve quality in the skin sub-sector,” he said, expressing the hope that the proposal will be examined and included in tax proposals during the ongoing parliamentary budget session.

The livestock sector is predominantly made of smallholder keepers and pastoralists, overly subsistent in character and lacking access to modernised inputs, professional services as well as adequate information on opportunities in the sector and produce markets.

.Anna Malongo (25), a shoe maker in Nkunhungu suburb of Dodoma said that high pricing of the machines compels fabric makers to use manual types of tools that consume more energy and time to make a product, underlining that with more skin processing plants shoe makers would do a better business and cut prices of shoes.

Local leather dealers say that leather tanning and processing machines cost is about 80m/- per unit, with traders blaming taxes on importing such units, meanwhile as low investment in value addition prunes earnings substantially by exporting raw hides and skins.

Tanzania is the second in livestock numbers in Africa, accounting for 11 per cent of African cattle population, while the contribution of the leather sector to GDP is statistically minimal, experts say.

Critics say low public financing in budget allocation is the problem, but others point at low capitalisation of the sector, anchored in traditional livestock keeping on communal lands hindering credit flows to build factories or acquire modern technology.

Last year, the government launched the Tanzania Livestock Master Plan (TLMP) to address major challenges facing the sector as part of the Tanzania Development Vision (TDV) towards 2025, projecting a livestock sector that is commercially run, modern and sustainable.

It is expected to be using improved and highly productive livestock to ensure food security, improved income for households and the nation while conserving the environment, all of which is inconsistent with current grazing land occupancy and rearing structures..

However, the trend setting Analysis of Public Financing on the Livestock Sector, a study by civil society organizations, shows that for the last six fiscal years, Tanzanian national budget has been increasing at consistently high rates, and thus its capacity to finance various sectors.

It rose by 15bn/- in the fiscal year 2012/13 and over 31bn/- in fiscal 2017/18, where the total budget doubled from fiscal 2012/13 to fiscal 2017/18, while public agricultural sector financing did not exceed seven percent.

Government commitment to the Maputo and Malabo declarations implies it adheres to 10 percent national budget allocation to the agriculture sector to attain annual 6 percent sector net growth, CSOs emphasise

Top Stories