The East African Community (EAC) tax authorities have committed to push for the harmonisation of domestic taxes in the region in order to deepen trade and investment.
In the latest joint communiqué released in Nairobi, Kenya, the commissioners general of the revenue authorities of Tanzania, Rwanda, Kenya, Uganda and Burundi also said they had agreed to enhance tax compliance.
The harmonisation of domestic taxes is expected to be achieved by developing a common customs management system to replace the independent systems used at individual state partner states of the EAC.
“This will enhance information sharing and help prevent cross-border fraud,” said the statement issued at the end of the 45th East Africa Revenue Authorities Commissioners General (EARACGs) meeting that was held days ago.
“To further deepen the EAC Common Market, RAs resolved to more boldly champion the domestic tax harmonisation agenda with a view to removing internal distortions to the free movement of labour and investment flows,” added the communiqué.
The officials agreed to implement the electronic East African Community Customs Valuation System to enable value benchmarking of various goods.
The major goal of these meetings is to ensure that the revenue agencies in the region work together towards the harmonization of tax regimes in the region aimed at fostering competitiveness, employment, and further contribute to the sustainability of public finances and eventually economic growth in the region.
The East African Revenue Authorities Technical Committee (EARATC) helps the Commissioners General to identify challenges, carry out studies and analyse technical issues in tax administration. The committee also provides appropriately researched recommendations in line with international best practice and subsequently ensure implementation of the agreed recommendations.
The EARATC’s key achievements in the past few years include; the annual publication of the Regional Comparative Revenue Report, Performance Based Pay, Succession Management Framework, technical assistance to South Sudan in establishing her revenue administration, study and analysis of production sharing agreements, identification of inadequacies in the laws targeting the extractive industry, among others.
Other achievements include; addressing emerging concern on increased volume of transit of sensitive goods through Kenya and Tanzania to non-EAC countries, harmonization of tax procedures, establishment of forensic laboratories, tax payment through electronic devices, formation of international tax offices, taxation of multinational corporations, and making revenue authorities to be a single revenue collector.