The Textile and Garment Manufacturers Association of Tanzania (Tegamat) has charged its government to take on its responsibility of cracking down on textile felons within the country.
They noted that these smugglers smuggle clothes in from other countries, which offsets the market share of local textile dealers.
Last week, Africa’s richest man Dangote shared a similar grievance towards the familiar foe. He too demanded that the Nigerian government crackdown on textile smugglers and issue the harshest punishment possible for such a crime. Read Story here.
On Thursday, however, reports of irate Tanzanian textile merchants demanding that the Tanzanian government resolve the issue of textile smuggling made headlines.
Tegamat executive secretary Adam Zuku made the call during a stakeholders’ meeting in Dar es Salaam.
The executive secretary disclosed that some bad apples in their industry were sabotaging local producers by importing clothes contrary to the government’s regulations, thereby allowing the country to lose billions in tax revenue.
“We ask the government to take stern measures, including prosecuting all smugglers. It’s an open secret that the government loses a lot of money due to this kind of sabotage.” Mr. Zuku said.
He also disclosed that the Tanzania Revenue Authority (TRA) recently seized two containers in Tabata, Dar es Salaam, which were full of clothes that had been illegally smuggled into the Tanzanian borders.
These sorts of activities have had devastating effects on the Tanzania textile economy, and local producers are outputting less owing to paranoia in the industry.
“Smuggled clothes are sold at much lower prices, affecting local manufacturers. This is because local producers are unable to meet production costs, unlike smugglers, who don’t pay tax.” He said.
The executive secretary went ahead to note that the only viable option at this point is that these smugglers are dealt with to the full extent of the law.
He noted that the 17 garment factories in 2000, have dropped to only eight. These factories are currently operating at 40% to 60% of their capacities due to instability in the market brought about by crooked competition.
Mr. Zuku also said some importers pay little or no taxes, which means that local producers cannot compete.