The Ministry of Finance has waived the 150pc taxation imposed on the export of semi-finished leather. The taxation was imposed on the export of crust leather, the leather that has dried after tanning but has not yet been dyed, in 2011 with the aim of encouraging the export of finished leather and leather products. The taxation system has backfired as the local tanneries have failed to meet the quality requirements of the world market. Supply of low-quality raw hides and skins was also another challenge of the industry mentioned by the tanneries. Though the law was legislated in an attempt to promote exports and increase export revenue, the industry has been suffering and export value has also been declining. The taxation was lifted to encourage the weakened export performance of the industry, according to Teka Gebreyesus, state minister for Trade & Industry. Last fiscal year, Ethiopia earned 134 million dollars from leather and leather product exports, according to the Livestock Industry Development Institute, below the targets set by the Second Edition of the Growth & Transformation Plan (GTP II), which is around 280 million dollars.
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