Kenyan revenue losses exaggerated

26 April 2004

The row over import and export taxes, plus the alleged growing illegal trade and export of Kenya's hides and skins has resurfaced with a vengence. Acting Kenya Hides and Skins Association (KHSA) chairman Robert Njoka said in an Interview: 'My predecessor Amos Ngonjo stated the industry loses an estimated Ksh10 billion in revenue annually to crooks in the industry. 'This is impossible. Even if all the animals in Kenya were slaughtered today, the cumulative revenue totals would never reach that figure. I appreciate that some traders have under-declared values and weights in the past, but the figures being bandied around are laughable. 'It is just not possible for the industry to generate that kind of tax in the first place.' He added: 'Although tax evasion was rampant in the past, measures have been put in place to ensure that every single shilling is paid to the government.' Njoka denied that exporting raw hides and skins had affected the tanning industry, claiming the companies that closed did so voluntarily. 'It is erroneous to claim that tanneries closed due to lack of raw materials, most of these firms closed long before exporting of raw hides and skins became important. 'For example, Kamiti Tanners was closed after the local community demanded its immediate closure, and Bawazir Tannery was forced to shut after directors pulled out. Many tanneries were still operational but prefer contract tanning for exporters who have no tanneries.' The KHSA is now co-operating closely with the Ministry of Agriculture to settle a long running dispute between leather traders and government. In the 2000-2001 fiscal year, the government imposed a levy of 20% on imported hides and skins (mainly from Uganda and Rwanda). However, this year it was reduced to 15% following strong lobbying by the industry. Joining the debate, the secretary general of the Kenya Shoe and Leather Workers Union, Joseph Bolo, decried the decline of the tanned leather sector, saying it was costing the economy jobs. Bolo said: 'The exporting of raw hides and skins to China, India and Pakistan was tantamount to robbing the country of revenue. In addition, these same countries had put an export ban on their own hides and skins to protect their local tanning and leather working industries, while destroying those of Kenya and other African countries. It must be stopped!"

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