Hurdles Before National Industry [Archives:2000/50/Reportage]

Yasser M. Ahmad
Yemen Times
Researchers and industrialists represented by the Yemeni Industrialists Society think that development of national industry is hindered and blocked by a number of factors. Some of those factors are:
1- Unjust treatment of national products by customs authority.
2- Tax ambivalence and high cost of national production
Many factors help increase costs of national products against imported ones. Factors like imposing taxes on devices and systems used in production, high rate of electricity services, high taxes on imported raw materials, expensive transportation and high interest rates on loans of local banks- all lead to the price-rise of national products.
The tax ambivalence is represented by imposing taxes on imported raw material before they are manufactured and, then when products are manufactured, by disregarding the fact that these materials are subject to damage. Industrialists may have loans from banks at high interest rates for products that are not yet manufactured which makes them increase prices later. Researchers have established that taxes on clothes is between 5% and 15% in case of other kinds of imports while foreign products are subject to only 5% taxation.
3- Difficulty of exporting national products.
Industrialists complain about long procedures of clearance of raw materials, absence of specific tariffs for air shipments, lack of any agreements with other countries to exempt some of Yemeni products from custom fees, etc.
4- The cabinet decision to impose 5 rials for each package for improvement of cities. This means that factories have to pay taxation for about four times. In other words they have to pay taxes for raw materials, after production they pay taxes for products; taxes are added to electricity service charges and there is the taxation for factories themselves as a commercial institution.
Industrialists meetings have come out with a number of recommendations such as: classifying all raw materials as the same with the same tax structure (5%), Imposing new taxes on imported products that have similar national products to the extent of 40-50% as in many other countries, reconsidering laws of production and consumption taxes, improving transportation which is monopolized by transportation offices, and respect for all verdicts that ensure industrialists rights.

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