Some players in the garment-making sector are allegedly skimming the Government of billions of dollars in potential tax revenue and suffocating downstream textile industries by abusing a special clothing manufacturers' rebate (CMR) designed to protect domestic apparel producers from external competition.
A month-long investigation into the conduct of some industry players showed that after benefiting from the rebate on imported fabrics, some clothing manufacturers were using transfer pricing, under-invoicing and incorrect declarations to evade local taxes while taking advantage of preferential trade agreements to realise huge profits in regional markets.
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