Incentive renewal ends uncertainty for textile exporters

ALAN PEAT
THE RENEWAL of the clothing and textile export incentive, the duty credit certification scheme (DCCS), from April 1 has been “a saviour for many companies strapped for cash flow”, according to Igsaan Sali, president of the SA Textile Federation. Although it has seen the fully tradeable nature of the duty credits being dropped from this March, credits earned in the year April 2006 to March 2007 will be useable within a manufacturer’s operation – allowing the company reduced duty on its own imports of goods used within its production processes. The announcement by the department of trade and industry is also significant, Sali added, in that it gives a surety to exporters, who have had to rely solely on verbal commitments from the government since the DCCS expired on March 31 2005. The renewal of the duty credits is linked to another programme that is of vital importance to the future health of the SA textile and clothing sectors, according to Sali. This is the question of what replaces the two-year interim clothing and textile development programme when it expires at the end of March next year. In this, Sali told FTW, a working group has now been established to seek the replacement for the interim scheme. “What is needed,” he said, “is to develop a programme to satisfy all of the parties” – both in the industry and in government.