Textile industrialists call for fair Custom fees

Measures to avoid tax evasion and dumping

The Syndicate of Textile Industrialists called for applying tailored custom fees on new and used clothing to avoid tax evasion. Naji Mouzanar, Syndicate Secretary, said: “Traders are importing new clothes as secondhand clothes to be exempted from taxes.”

The Ministry of Industry agreed to submit an official memorandum to the Ministry of Finance and to the Customs administration to address the issue.

Taxes on new clothes are set at five percent (except for countries with whom Lebanon has free trade agreements), with a minimum of $3.7 for each kilogram including Value Added Tax (VAT).
Fees on used clothes are the same, but the average price of used clothes does not normally exceed $0.85/kg. Mouzanar said that the government had previously removed the qualitative tax on used clothes which was $10/kg. “These measures harmed the textile industry,” Mouzanar said.

In 2013, about 14,600 tons of declared ‘used clothes’ were imported, compared to 12,000 tons of new clothes. Mouzanar said: “In spite of these official figures, we rarely find retail shops selling secondhand clothes, as retailers are obliged to indicate on the labels whether clothes had been worn.”

The Syndicate proposed long-term solutions to activate the textile industry in the future. These include: Exempting textile raw materials from VAT and considering cloth importers as end users to avoid dumping. They also suggested prohibiting the import of used clothes, and setting special areas to market local clothes in the duty free zone at the Beirut Rafic Hariri International Airport.

The Syndicate also proposed rescheduling industrialists’ and traders’ debts, suggested resetting qualitative fees on used clothes, and called for applying unified mandatory standards.