The Commissioner of Economic Affairs at the EAC Affairs Ministry, Leonard Kizito Ojara says Uganda as a member is ready to implement policies geared towards the harmonization of the policies because the government knows its implications.
of Finance, Planning and Economic Development and the Uganda Revenue Authority
have agreed that there is a need to quickly centralize the collection of
government revenues within the East African Community.
of the EAC Common Market Protocol provides for the harmonization of tax
policies to remove distortions and facilitate the movement of persons, goods
and capital, to promote trade and investment, while Article 8 of the EAC
Monetary Union Protocol provides for harmonization of fiscal policies for the avoidance
of harmful competition.
Commissioner of Economic Affairs at the EAC Affairs Ministry, Leonard Kizito Ojara
says Uganda as a member is ready to implement policies geared towards the harmonization
of the policies because the government knows its implications.
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countries have persistently introduced new taxes against EAC made products as
well as on imports from other regions, sometimes disregarding the common
A study of
the tax systems in the EAC by the Southern and Eastern Africa Trade Information
and Negotiations Institute, SEATINI, found that the main impediment to
implementing this are the failure to apply the EAC Code of Ethics and fear of
losing national revenues, among others.
SEATINI Uganda Executive Director, Jane Nalunga told a Post-EAC Budget
Dialogue, that the EAC also has no guiding principles for implementing certain
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have caused controversies in the region include excise duties on goods produced
within the region, as well as the varying rates of Value Addition Tax and
recently, Capital Gains Tax.
example, charges a VAT of 16%, while the rest of the countries impose 16% on
the products produced within their countries and later sold to other partner
Kagumire, this makes Kenya’s products cheaper than those of other countries, and
in the end, promote smuggling.
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says that harmonization does not mean similar or equal tax rates, but the similarity
in the tax policies. This helps to prevent any national tax measures that
would harm the free movement of goods, services and capital within the
Nalunga noted the need to develop an online platform that tracks tax amendments
across the region saying that this would greatly support easy comparisons and
subsequently early interventions against harmful tax measures.
that otherwise, without harmonization, regional integration cannot succeed.
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noted that it is difficult to harmonize some policies because the different
levels of development in the region mean some needs of the countries are
specific to those countries.
important to appreciate that we are at different levels of development as
partners. As we are implementing tax harmonization, we need to consider the
possibility of having centralized revenue administration collection. That is
the big picture”, he said.
says until the region implements a system of joint revenue collections, as well
as harmonize other policies, competition will persist.
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He also says that regional integration can never be achieved without tax
harmonization because it helps mitigate tax competition and also reduce the
appetite to smuggle if one country has unfavourable tax regimes.
says that as companies are given tax incentives, it’s very important for them
to provide a good working environment for the countries to achieve this tax
Tax harmonization involves adjusting tax systems of different jurisdictions in
the pursuit of a common policy objective.
Of the East
African countries, Uganda has moved furthest in implementing EAC protocols
relating to tax, trade and movement of persons, according to the study by
Wanyama, the Coordinator of the East Africa Tax and
Governance Network said there is a lot of lack of political will amongst
the countries, calling on them to take the example of Uganda.