MEAT processor, Cold Storage Company, says it has registered an increase in hides processed at its tannery following the imposition of an export levy on raw hides by the government.
The government introduced a 75 cents per kilogramme levy on raw hide exports in January last year as a measure to boost value addition in the leather industry.
CSC chief executive Ngoni Chinogaramombe told a Parliamentary Portfolio Committee on Lands, Agriculture, Mechanisation and Irrigation, on Tuesday that the company has started to reap the benefits of the export levy.
“We’ve a tannery, which is now starting to operate meaningfully but it’s under judicial management.
“Our tannery was one of those that were affected (by export of raw hides) and it wasn’t operational for some time. But thanks to the new Law, most traders are now compelled to tender their hides to either us, Bata or any other tannery in the country. We understand that there are some leakages and people are still smuggling raw hide out of the country, but it has helped our company to the extent that since January, we’ve seen an increase in hides being processed from just over 1,000 to 10, 000 last month,” he said.
At the time the levy was introduced, there was an outcry from abattoirs who said their viability was challenged as a result of the levy.
The Livestock and Meat Advisory Council in its 2014 report said tanners were unable to buy raw hides from abattoirs while abattoirs were also unable to pay tanners for them to custom tan on their behalf due to lack of finance.
Minister Patrick Chinamasa early this year announced a tax relief for raw hides exports to nine registered merchants. “Subject to section 12C of the Value Added Tax, export relief shall be granted on unbeneficiated hides exported by a registered merchant issued with an export permit by the Minister of Agriculture as approved by the Minister responsible for industry and Commerce,” Minister Chinamasa said in the Government Gazette on February 6.
He said the relief shall not exceed the maximum quantities prescribed for each individual exporter while the unbeneficiated hides shall be exported through the port of entry nearest to the stockpile of the raw hides.
The CSC tannery was one of the largest in Zimbabwe but in the past 10 years, the leather sector has been failing to absorb all raw hides and skins that are produced leading to more hides being exported from Zimbabwe in their raw form.
The country exports cow, crocodile, zebra, hippo and buffalo hides. — BH24.