Manufacturers protest overdue customs duties
Bank accounts, TINs blocked
A group of small-scale textile manufacturers have voiced their rage against the Ethiopian Revenues and Customs Authority (ERCA) over “exaggerated customs duties” levied on the imports of raw materials, The Reporter has learnt.
According to representatives of 150 textile manufacturers and their lawyer who approached The Reporter on Thursday, ERCA’s decision to collect what it said to be unpaid customs duties by small-scale textile manufacturers following a Post Clearance Audit campaign referring to an accrued amount three years ago.
According to the petitioners, ERCA has regarded the invoice prices they have submitted at the time and on the basis of which the duties were calculated to be “under-invoiced.” The manufacturers have incurred the duties importing raw materials from abroad to be used in the production process.
Teka Mehari, lawyer and legal consultant, told The Reporter that the whole problem started from the undue revaluation of the raw materials which were imported by these manufacturers some three years ago. In fact, Teka asserts that revaluating imported raw materials after three years is inherently erroneous. According to Teka, the price of polyester knitted fabric, polyester semi-finished knitted fabric and polyester trimming materials were three of the raw materials whose invoice prices were rejected after three years.
Teka argued that the declared values have been submitted to ERCA based on the guidelines and as per ERCA’s regulation. For instance, a kilo of polyester knitted fabric, which the manufacturers solely imported from China three years back, cost on average between USD 0.50 and USD 0.70 cents per kilo. That has been rejected and reevaluated by ERCA at USD 2.80 per kilogram, recently.
“This is outrageous and unacceptable. It is a violation of the rules and regulations put in place for manufacturers,” Teka said.
The price differentiation, according to the manufacturers, has caused tremendous havocs in the production activities and many voiced that they are on the verge of shutting down. Some have stated that they have been requested to pay an overdue customs duties reaching up to 34 million birr. The infuriated manufacturers now are under serious trouble as ERCA launched a campaign to freeze bank accounts and block their Trade Identification Numbers (TIN). So far, bank accounts of 80 manufacturers have been blocked.
Claiming that some 30,000 jobs are at stake, the manufacturers have requested the government to reconsider their case. They have also stressed the need for serious consultations. The Reporter has learnt that ERCA and the Ministry of Finance and Economic Cooperation (MoFEC) have received compliant letters the manufacturers have submitted.
Attempts made by The Reporter to include responses both from ERCA and MoFEC bore no fruit. Haji Ibssa, Communications and Public Relations Director at MoFEC, told The Reporter that he has to learn about the issue and will be available on Monday for details. Calls made to officials of ERCA until press time were not answered.