A new study proposed that the 10 percent excise tax imposed on imported textile products be lifted.

The study also suggested that separate taxes be imposed on finished and partially finished textile products replacing the indiscriminate 35 percent tax.

The proposal was made following a study by the association of textile producers in collaboration with concerned government bodies.

Results of the study indicated that the association and the government had reached a common understanding that it was not right that all kinds of textile products should be taxed uniformly, Sleshi Lemma, director general of the Institute of Textile Industry, said.  

According to the study, the agreement concerning the inappropriateness of the excise tax on textile products was reached as a result of the common understanding that clothes were not luxury goods.

Besides, the study proposed that partially finished products should be taxed at a smaller rate than the finished products. 

Sleshi said that the study had been submitted to the government with the proposal for lifting the excise tax and imposing separate tax for finished and partially finished textile products. It is expected that the government will consider the study and approve of the proposal. 

Sleshi said that the government had already accepted the proposal for imposing separate tax on finished and partially finished products. But no decision has been made regarding how much the revised tax should be.

Ethiopia imports about 5 billion birr worth of clothes and textile products annually.

Source: Reporter