Hides smuggling hits Dar’s leather industry

The government is losing more than 1bn/- per month in revenue due to smuggled raw hides and skins as about seven to 10 containers pass illegally through the Dar es Salaam port.

Tanzania is the second in Africa with the largest number of livestock having potential of producing 3.6 million hides and around 6.1 million skins, but almost all tanneries in the country have shelved production due to insufficient raw materials.

This was revealed on Tuesday in Dar es Salaam by the Tanzania Tanners Association Chairman Mr Onorato Garavaglia while commenting on the failure by the Tanzania Revenue Authority (TRA) take appropriate measures against owners of the three containers of smuggled raw hides and skins at the port.

Last week, three containers each weighing 80 tonnes of what is claimed to be wet salted skins and hides were impounded at the Dar es Salaam port being under declared.

The value of the consignment is estimated to be over 240m/-although the owners under declared its value at only 140m/-.

"The three containers seized last week at the port is just a small portion of the consignments of raw hides and skins smuggled every day, thus stunting the growth of the leather sector as well as denying the government massive revenues," he said.

Mr Garavaglia said each container passing through the port is taxed between 30m/- and 40m/- depending on whether is raw hides and skins respectively.

Apart from swindling the much needed government revenues; the malpractice has been denying tanneries necessary raw materials, thus cutting down production capacity. This has also resulted into the factories cutting down number of employments for operating under capacity.

"It is not enough to impose penalties on the culprits linked with the smuggled raw hides and skins but it is high time that the government take stern measures against them including confiscation of the consignments," he added.

He added, "As Tanners association, we would like to know the owner of the containers, where were the consignment heading to and where the raw hides and skins originated."

He said while the government was struggling to put favourable environment for investors, there are few government officials putting stumbling block to the efforts by collaborating with some owners of the warehouses to ensure the illegal business is successful.

Speaking at the event, the Leather Association of Tanzania (LAT) Executive Secretary Mr Joram Wakari said it was high time that the government act strongly on the illegal business on raw hides and skins for the sector to contribute accordingly to economic growth.

For example, according to the study commissioned by Tanners Association, more than 10,000 people could have been employed in the sector and about 15.67bn/- paid to the government annually in terms of pay as you earn (PAYE), skills and development levy as well as workers pension contributions if conducive environment could prevails.

The study revealed further that tanneries could pay more than 6.48 million US dollars as import duty annually for the importation of chemicals.
Source: Daily News, reported from Dar es Salaam, Tanzania
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