HomeBusinessWaiver hides export levy: Industry ministry

Waiver hides export levy: Industry ministry

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THE Industry and Commerce ministry has recommended that the government allow abattoirs and other small players, who have animal hides, to export them without being charged the 75 cents export levy.

BY MTHANDAZO NYONI

Minister of Industry and Commerce Mike Bimha
Minister of Industry and Commerce Mike Bimha

According to a confidential report of the meeting on raw hide and skins held at the of Industry and Commerce ministry on June 30, 2017, the leather sector in Zimbabwe is in intensive care.

In the meeting, stakeholders said Statutory Instrument (SI) 16 of 2016 was disadvantaging both hides, collectors and tanners and should be repealed.

“As a ministry (of Industry and Commerce), we are recommending that if the local industry is not in a position to buy them (hides), we allow the abattoirs and other small players, who are in possession of these hides, to export without being charged the export levy,” reads the report signed by Hazel Magumise, an official in the Industry ministry in the enterprise development department.

“Raw hides have a short shelf life and the quality deteriorates, hence, the losses abattoirs continue to incur, which is not a healthy situation in the current economic environment. Some of the hides currently in stock have had a shelf life of six months. We are, therefore, seeking approval for export to that effect if tanneries are not able to purchase them,” it reads.

Stakeholders also proposed that any excess stock should be allowed to be exported without being charged the levy.

Bulawayo Abattoirs has 16 000 pieces of hides, while MC Meats and Koala Abattoirs have 11 000 and 5 000, respectively.

The industry is facing a plethora of challenges, chief among them, the non-availability of cash and a75 cents levy introduced by the government on exports of raw hides to encourage beneficiation.

An industry official, who preferred anonymity, told NewsDay that the prevailing cash shortages have affected all abattoirs, as producers are farmers living in areas with no access to electronic means of money transfer.

“Furthermore, the shops in such areas do not accept anything but cash. Do buses have swipe machines; do dip tanks have EcoCash facilities? Ninety percent of cattle are bought from traders that consolidate loads out of these marginalised areas and pay for the animals, transport etc in cash. These are not cash hoarders, but genuine people that need cash to exist,” the official said.

“No cash, no cattle simple! The auctioneers are also affected. You cannot go to a council sale with an RTGS [real-time gross settlement systems] and expect to buy cattle. As for tanning, we are barely surviving, we cannot venture into a business and use capital we do not have. We are a cattle-orientated business. Feedlots are our value addition in partnership with the producer.”

The official said they are holding on to a decaying hides waiting for remedial action from the government and had hope it will come soon.

“The tanning industries in Zimbabwe are in a dilapidated state, certainly in Bulawayo, however, if we do not attend to the cash issues and hide issues affecting the abattoirs, whether private or CSC [Cold Storage Company], we will soon join them,” the official said.

“Hides are our only form of foreign income for the importation of machinery and consumables in an abattoir.”

The official said there are no opportunities in the leather industry, as people do not have spending power and expenses associated with running an abattoir are huge.

“And we do not have an income from our hides,” the official said.

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