Economy
The Private Sector Lobbies for Harmonization of Taxes in the EAC Bloc
Private sector groups under the umbrella of the East African Business Council (EABC) are calling for a harmonization of taxes in the 2022/2024 budgets of East African Community (EAC) states in order to enhance consumer rights and freedoms. The taxes include income taxes, excise duty and value-added tax, the private sector seeks their request to be implemented to ease the cost of doing business in the EAC.
Kenya released its budget earlier because of the upcoming elections in August 9th , 2022 It has been the norm for all EAC countries to release their budgets at the same time. Uganda, Rwanda, and Tanzania will be releasing their budgets in June while South Sudan, Burundi, and the Democratic Republic of Congo will have their budgets effective from July 1st , 2022.
In a statement, the chairperson of the East African Business Council, Simon Kaheru, had advocated for a pro-people budget that factors in the compatibility of tax systems and policies in the region.
“Tax harmonization is extremely important for all of us as East Africans. Tax matters impact businesses and most importantly impact our people. What matters for us is to see a pro-people budget in all of East Africa in the 2022/23 financial year,” Kahenu noted. “We want to see harmonized taxes so that we have positive effects on the rights and freedoms of people and businesses in East Africa. This will enhance the integration of the East Africa region,” he elaborated.
The Chief Executive Officer of EABC, John Kalisa, advocated for a tax regime that offers flexibility, and equity for the regional bloc. “A good tax regime has the following components; convenience, flexibility, equity, and optimal economy. These should guide the reforms in terms of harmonization of domestic tax in the East African region. The private sector wants the excise duty harmonized in the region to allow for cheaper telephone calls and lower charges on communication,” Mr.Kahisa stated.
When it comes to excise duty, Tanzania and Uganda charge less than Kenya. For example, excise duty on data and airtime, Kenya applies 20 percent, Uganda imposes a 12 percent and Tanzania imposes a duty of 17 percent. Tanzania is known for imposing excise duty on fewer services in comparison to other East African states.
Excise duties on money transfer, Uganda ranks first with 15 percent, Kenya imposes a 12 percent charge while Tanzania and Rwanda offer a 10 percent excise charge.
