The Ministry of East African Affairs has warned that introduction of levies on transit goods by border counties is inhibiting trade within the East African Community (EAC). Principal Secretary Mwanamaka Mabruki said the move by counties to levy transit goods will hinder the community’s quest for seamless trade. “Imposing taxes on goods going to EAC member states, especially by counties at the border points, is one of the tariff barriers we are trying to solve. It is hindering trade and increasing the possibility of a retaliation by other EAC members,” she said. Kwale County had in its 2014/2015 budgetary estimates proposed introduction of levies on goods that pass through its jurisdiction from or to Tanzania. However, yesterday Omar Kitenge, member of the county budget committee, said these proposals were removed because “we thought it will go against the constitution.” Mombasa county government, on the other hand, is toying with a proposal to introduce levies on all goods that pass through the Port of Mombasa to broaden its revenue base. The county had proposed introduction of a two dollar levy for every tonne that pass at the Port.
Mombasa governor Hassan Joho has over time insisted that the port is the biggest asset the county has and it should therefore benefit from it. However, the PS has warned that introduction of a levy at the port will automatically push up the cost of import and is bound to elicit sharp condemnation from EAC members using the facility. A Mabruki said though she understands that counties have to find ways of generating income, imposing such levies is not within the spirit of EAC integration. She said her ministry is concerned that such a move could hinder smooth flow of goods and services in the region. Mabruki said that the ministry will engage all 47 counties, and especially those at border points, to make sure they understand the Government’s plan and policy on the integration process so as to avert such actions.
Source: Standard Digital
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