Accelerating VAT refunds for exporters, easing the process of getting cotton to textile factories, and making logistics more efficient were some of the recommendations the National Export Coordination Committee (NECC) made to improve manufacturing exports.
The committee chaired by Prime Minister Hailemariam Desalegn decided that exporters should receive VAT refunds within seven days.
Girma Tafesse, Director of Federal Inland Revenue of the Ethiopian Revenue and Customs Authority, told Capital that they can get exporters their VAT refunds within a few days.
“The VAT refund request is free from any tax issues,” Girma explained.
According to the proclamation, VAT refunds must be concluded within 60 days for exporters, but there were some discrepancies as different directives required VAT refunds to be implemented within seven, 30 and 90 days based on the business.
He said that the government is working to support the export sector so VAT must be reimbursed quickly.
The committee also amended the way cotton is supplied to the textile industry.
The committee stated that industries need to be able to get high quality cotton that has been studied to make sure it is the very best. Currently a French consultancy firm is undertaking a study to modernize the cotton sector.
The committee agreed that the manufacturing industry can import raw materials without submission of CAD as well as the importance of providing pre-loading services through the Commercial Bank of Ethiopia.
The committee also came up with ways to better coordinate activities, logistics, finance and supply of cotton. Textiles and garments are a focus area of the government so it is trying to attract more investment and grow more cotton.
Because manufacturing exports have been significantly lower than targets this year, the government has been working to support the sector.