Rwanda Revenue Authority (RRA) reports that the seized second-hand clothes tons were shipped into the country illegally.
The increase in caguwa fraud results from the hiking of taxes on used wears.
RRA Commissioner-General Richard Tusabe told IGIHE Thursday that the 200 fraud tons have been destroyed since 2016.
“We encourage caguwa fraudsters to get together and consolidate their capital to start textile manufacturing within Rwanda instead of bringing in the country substandard clothes,” he said.
In July 2016, Rwanda hiked taxes on used garments and shoes from $0.2 and $0.4 respectively to $2.5 per kilogram and further to $4 and $5 on used garments and shoes respectively in July 2017.
The 2017 tax was maintained in the current fiscal year that started in July.
Discouraging imports of used clothes and shoes intends to promote local manufacturers through the initiative dubbed “Made in Rwanda.”
The ban on importation of second-hand clothes and shoes was in May 2016 endorsed by the East African Community (EAC) Heads of State during a summit in Arusha, Tanzania.
The resolution intends to phase out caguwa by 2019.
This aims to resuscitate the struggling regional textile industries, create entry level jobs and reduce trade deficits in the EAC member states.
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