East Africa: EAC Tax Variance Still a Major Hurdle – Kam

REGIONAL businesses continue to suffer from double taxation three years after a plan to harmonise taxes was approved, causing a delay in realisation of East Africa Community integration benefits.

Kenya Association of Manufacturers CEO Betty Maina said the tax issue needs to be urgently addressed by ensuring all member countries harmonise their tax laws.

“Harmonisation of taxes was approved three years ago but has not been ratified,” said Maina yesterday. KAM wants harmonisation of excise tax which continues to be administered as a domestic tax in partner states.

She was speaking during a media briefing on progress of the EAC Common Market ahead of the 16th EAC heads of state summit in Nairobi next week.

Other challenges she cited as impeding faster realisation of the EAC goals include obtaining licences from professional bodies to practice, lack of recognition for professionals and cumbersome legal and administrative frameworks of local authorities.

East African Affairs, Commerce and Tourism Cabinet secretary Phyllis Kandie on her part said there have been major milestones achieved towards intergration this year alone, including solving a tour operators row with Tanzania on visitor movement across the border.

“Tanzania and Kenya have agreed to collaborate closely on a wide range of issues by reverting to the 1985 Bilateral Agreement on tourism operations which allows tourism vans to drop tourists at convenient points in their repsective countries as opposed to teh earlier arrangement where tourists were being dropped at border points,” said Kandie yesterday.

Tanzania had caused an uproar among Kenyan tour operators by charging them fees and restricting entry into its territory despite Kenya opening its parks and border to their Tanzanian counterparts.

“The partner states further agreed to scrap all fees levied on tour vans, tour guides and couriers,” said Kandie.

Prior to the summit next week, the EAC presidents will hold a meeting on infrastructure development financing on November 29.