Tax incentives for the textile industry
Kenya has started offering tax incentives to clothing
companies, a key part of it’s under performing manufacturing
sector, to create jobs and provide affordable new clothes for
the domestic shoppers.
The textiles industry is now allowed to sell 20% of their
annual production locally without sales taxes and without paying
import duties on the materials and equipment used to produce the
textiles and garments.
The advent of cheap, second-hand clothes imports from the US
and Europe, locally known as mitumba, in the 1980s, put local
apparel firms out of business and reduced production of raw
materials like cotton.