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Crocodile-Skin Export Tax Is Killing Industry, Zambian Farmers Warn

Crocodile-Skin Export Tax Is Killing Industry, Zambian Farmers Warn

(Bloomberg) --

Zambian crocodile-skin exports slumped this year after the government imposed a duty that threatens to shut down the industry, the Zambian Crocodile Farmers Association said.

Shipments of the reptile hides are expected to fall to about 22,000 this year, compared with 31,685 in 2018, the Lusaka-based association said in an emailed statement on Tuesday. Zambia’s government introduced a 10% levy in January that requires crocodile farmers to pay the duty up front, before they can export their produce.

Crocodile-Skin Export Tax Is Killing Industry, Zambian Farmers Warn

Zambia’s Treasury has introduced a series of new taxes this year to help fund repayment of external debt that’s ballooned sixfold over the past decade. Taxes imposed on the mining industry led copper producers to forecast an 11% drop in output this year.

About $1.3 million of crocodile skins are stuck in cold storage because farmers can’t raise the money to pay the tax, association Chairman Johann Jordan said in the statement. Two farming operations have closed, with another two planning to halt operations, he said.

“The situation is dire,” Jordan said. “This tax is on the verge of killing the industry.”

The international market for crocodile skins, used to make goods ranging from Hermes International SCA handbags to LVMH Louis Vuitton Moet Hennessy SA wallets, is estimated to be worth more than $100 million, according to the association.

--With assistance from Matthew Hill.

To contact the reporter on this story: Taonga Clifford Mitimingi in Lusaka at tmitimingi@bloomberg.net

To contact the editors responsible for this story: Gordon Bell at gbell16@bloomberg.net, Paul Richardson, Alastair Reed

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