Tax Relief Needed To Help Textile Industry

MEDIA STATEMENT ISSUED BY:
PROF ES CHANG MP
IFP SPOKESPERSON ON TRADE AND INDUSTRY

November 6, 2006

The Inkatha Freedom Party's Spokesperson on Trade and Industry, Professor ES Chang MP, has welcomed the Free Trade Agreement (FTA) between the South African Customs Union (SACU) and the European Trade Association (EFTA), but said that more needed to be done to help the textile industry.

"Based on the SACU and EFTA agreement, the textiles and clothing industry will enjoy duty free exports to the EU, but a similar agreement covering other parts of the world is needed," said Ms Chang.

"In South Africa today, there is a need for export clothing - and in the export market there is a requirement for a variety of fabrics to buyers' demands and standards. This leads to the import of certain yarns to South Africa. The textile industry imports the yarn that is converted into fabric; which is in turn produced into clothing. Finally the clothing is exported again. The IFP would however like to raise the concern that at present, customs do not provide any mechanism to let the textile industry import yarn under a tax-free rebate.

"In other countries there are special measures for this kind of situation, which they call co-operative exports. Under this agreement, co-operative countries can import goods tax free.

"The IFP therefore calls on Government and SACU to urgently look at supportive measures to solve this problem. At the moment the textile industry is forced to pay import duties on yarn, and in the long run it is not workable as it will not aid the textile industry to grow and create more jobs," concluded Prof Chang.



FOR FURTHER INFORMATION CONTACT:
Prof ES Chang MP 082 578 5019
Liezl van der Merwe 083 611 7470