PUBLISHED ON January 15th, 2015

Report pushes for levy on imports in regional blocs

Regional blocs including the East African Community (EAC) should introduce a levy on imports to help self-finance its organs, a new report suggests.

The regional entities have depended solely on contributions from members yet a number of countries have not been meeting their obligations.

A report by the African Capacity Building Foundation (ACBF), a financier of research institutions in Africa for over a decade, said a country facing an economic crisis or catastrophe finds it difficult to pay dues.

ACBF said integration schemes such as EAC and the Common Market for Eastern and South African have copied the Eurozone model of regional groupings that depend on member contributions.

“A funding mechanism that combines national contributions with independent revenues, such as import levies, would go a long way to helping African regional economic communities become financially independent,” said the report.

However, analysts said clarity would be needed on how such a tax is to be implemented because some of the countries may fail to co-operate since the blocs do not have tax collection machinery.

“It is very good to have an alternative method of financing regional initiatives such as those we are party to. But the tax also has to be collected by someone. Who is it that would collect it?” asked Joseph Kieyah, principal policy analyst at the Kenya Institute of Public policy Research and Analysis.

Prof Kieyah said the levy alone would not achieve much unless there are willing participants in regional integration schemes. He said the citizenry and the private sector would need to be closely involved for buy-in.

“What we need is to drive integration from the bottom rather than from the top as has been the case all along. Citizens need to be sensitised about the importance of the regional integrations schemes so that they can get leaders to act,” he said.

In the EAC there have been divisions over pace of integration. The ACBF reports that obstacles to stronger blocs include the lack of enforcement mechanism for its decision, lack of citizen awareness as well as low human resource capacity in the groupings.

In the areas of human resource, the report notes shortfalls in contrast to the EU that has employed about 30,000 staff, two-fifths of whom are involved in policy design, implementation, and monitoring and evaluation.

Source: Business Daily

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