EAC needs tax harmony
KIGALI, Rwanda – The need of a tax law on reverse VAT to be harmonized among EAC states was highlighted during the recently concluded East African Business Summit that took place in Kigali.
“Tax law on reverse VAT can be harmonized among EAC states,” Rwanda Revenue Authority Commissioner General Richard Tusabe said during his presentation at the summit.
Business leaders advised governments to harmonise their laws in accordance with the Organisation for Economic Co-operation and Development (OECD) to enable companies to engage in cross-border trade more efficiently.
Rwanda is currently reviewing its OECD-based transfer pricing rules and is drafting guidelines, a move that will allow for more detailed regulations to be put in place.
Tusabe said Rwanda wants to amend the law on zero rating VAT on services by end this year since the country knows that the quality of a service is as important as its being sourced locally.
He assured business leaders that the government is working with stakeholders to ensure that uncertainties with the law are addressed.
Rwanda is looking at issues of VAT on imported services and having discussions with multinationals that operate in the country so that the law takes into account the business models of various businesses across the region.
“EAC partners States will definitely move towards common transfer pricing practices,” Josaline Ogai , the acting Commissioner for technical support services at the Kenya Revenue Authority said.
During the summit it was noted that speedy implementation of fiscal policies is important since delays cause substantial losses to businesses.
The different developments made in meeting cross-border trade were also looked at.
Movement of cargo from Port of Mombasa to Uganda has reduced from 18 days to 4days and from 22 days to 6days to Rwanda which is supporting doing business in the region.
“Electronic tracking has reduced the time taken to move goods from Mombasa to Rwanda and Uganda,” Richard Kamajugo Commissioner for Customs Uganda Revenue Authority said.
He said the strongest stakeholder in cargo movement by road is the truck driver.
The EAB Summit is an opportunity for business and political leaders to share their thoughts on how best to accelerate development across East Africa in order to bring inclusive and shared prosperity to the people.
This is why the theme of the year was “Positioning East Africa for Inclusive Prosperity in 2020 and Beyond” which theme captures the essential aim of the EAC integration agenda demanding all East Africans to reflect on how they can collectively expand the circle of opportunity for the region and the continent.
The Summit brought together EAC business leaders, government officials, and different organizations.
