The Association of the Lao Garment Industry recently urged the government to reduce taxes on imported raw materials to lower production costs and make the industry more competitive globally. More domestic garment production warrants such a step, its deputy chairman Xaybandith Rasphon said.

Reducing tax on imported raw materials is needed for the garment industry’s survival, Rasphon said, as the government wants people to use more indigenously-manufactured garments and also expects factories to generate more employment.

The country’s clothing exports comprise 10 per cent of its total exports and the sector employs slightly more than 1 per cent of the country’s labour force, according to a 2016 World Bank report.

In recent years, the industry has been affected by labour shortages, with many workers migrating abroad for better options, an Asian radio network reported.

Out of the 77 garment companies in Laos now, 51 are large firms producing for export, according to government statistics. There are also 26 small and medium companies producing clothes for domestic consumption.

Of the 53 companies that are members of the garment association, seven are owned by Lao citizens, six are joint venture companies and 40 are foreign owned.

Fibre2Fashion News Desk (DS)

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Lao garment association calls for reduced tax on raw material imports