Last week, Anatoly Nahayo, a law expert, was speaking recently after launching his book titled ‘East African Community Tax Harmonisation’. He was at the East African Community headquarters in Arusha advising his listeners on the wisdom for working in tandem when it comes to regional tax issues. Partner states have been talking quietly and carefully over the issue, but it is extremely sensitive. In most cases each country is doing its own thing, especially tax incentives. Nahana said there are limited avenues to query the decision of finance ministers to exempt individual business people or companies For some time now, the World Bank and International Monetary Fund have been politely and firmly advising regional governments to dispense with tax incentives. We are told tax incentives are bad in theory and bad in practice. Mainly because they distort company investment decisions and competition between companies. We are further told that giving tax breaks to businesses to attract investments and jobs actually ends up hurting the economy. The government will lose substantial revenue, which means difficulties in funding education, infrastructure improvements and other public services. Most of the EAC countries have dangled this tax incentive sweet with varying success. However, in recent years the most suitable way has been to set up export processing zones where companies can enjoy them. Kenya likes to lure textiles manfacturers to set up shop in special zones expected to be up and running in two to three years. Tax breaks are a central part of the...

ASMARA, Eritrea, 12 March 2015 / PRN Africa / — The East African Legislative Assembly (EALA) resumes business next week by holding its Plenary in Bujumbura, Burundi. The Plenary which takes place from Monday, March 16, 2015, to Friday, March 27, 2015, is the Fifth Meeting of the Third Session of the Third Assembly. The President of the Republic of Burundi, H.E. Pierre Nkurunziza is expected to address a Special Sitting on Tuesday, March 17th, 2015. The President of the United Republic of Tanzania and Chairperson of the Summit of EAC Heads of State, H.E. Jakaya Mrisho Kikwete, is also expected to deliver the State of EAC Address on March 19th, 2015. The State of EAC Address is delivered annually by the sitting Chairperson of the Summit of EAC Heads of State and it reflects on matters of policies related to the Community. The Assembly is to be presided over by the Speaker, Rt. Hon Daniel F. Kidega. Top on the agenda during the two week period are key bills which are expected to be debated. The Bills include the EAC Customs Management (Amendment) Bill, 2015 the EAC Competition (Amendment) Bill, 2015, the EAC Cross Border Legal Practice Bill, 2014 and the EAC Electronic Transaction Bill, 2014. The principal object of the EAC Customs Management (Amendment) Bill, 2015, is to amend the East African Customs Management Act, 2004, to facilitate the discharge of the functions of the Directorate of Customs and Trade as provided for in the Act and to...

NAIROBI: Kenya contributed the bulk of large capital infrastructure projects implemented in East Africa in 2014, followed by Uganda, Ethiopia, Tanzania and Rwanda respectively, a new study released on Tuesday reveals. According to the third edition of the annual Deloitte African Construction Trends Report 2014, transport sector accounted for 59 percent of all the projects in Kenya, representing a growth of 17 percent, while 37 percent of projects were focused on energy and power capacity development. However, the report which was launched in Nairobi notes that mega infrastructure projects in the East African region dropped significantly in 2014 as activity increased in the rest of the continent. “While there seems to have been a dip in current activity, there are a large number of significant projects in the planning phase that have not yet reached financial close and are thus not yet reflecting in the statistics of projects under construction,” Mark Smith, the Head of Infrastructure and Capital Projects at Deloitte East Africa, told journalists in Nairobi. In the East Africa region, the Chinese companies are mainly carrying out various infrastructural projects in different sectors that include energy, transport and real estate as relations between the East African nations and China soar. The most famous project in Kenya is the Thika Superhighway constructed at a cost of 330 million US dollars. The road cemented China’s construction authority in Kenya, and introduced the Chinese to the ordinary Kenyan. China is also constructing the Standard Gauge Railway whose construction has started and...

China accounted for over Sh1.8 trillion ($20 billion) worth of infrastructure development in East Africa last year, indicating the country’s growing influence in the region’s infrastructure development. New data shows that the Asian dragon’s share of the region’s Sh5.4 trillion ($60 billion) large infrastructure projects almost doubled from 19 per cent in 2013 to 31 per cent in 2014. According to the third edition of the annual Deloitte African Construction Trends Report 2014, China continues to bolster its lead in bagging mega-construction tenders in the region. “In terms of construction, China is still leading and maintains a strong foothold,” stated Mark Smith, head of infrastructure and capital projects at Deloitte East Africa. In 2013, Europe and the US accounted for 37 per cent of infrastructure construction but this share has since shrunk to 18 per cent in 2014. The report states that the number of mega-construction projects in East Africa declined by 55 per cent with the value of the same shrinking by 10 per cent, from $67 billion (Sh6 trillion) to $60 billion (Sh5.4 trillion). “Our view is that while there has been a dip in current activity, there are a large number of significant projects in the planning phase that have not yet reached financial close and are thus not yet reflecting in the statistics of projects under construction,” explained Dr Smith (pictured). In East Africa, transport projects took the bulk of the infrastructure spend accounting for 59 per cent of the projects with energy projects accounting for...

Burundi has launched an electronic cargo clearance system that is expected to speed up trade with other countries in the region. The new trade facilitation system, known as the Electronic Single Window (ESW), is set to enhance efficiency of cross-border trade at Burundi airports and border posts and reduce cost of doing business. “The Electronic Single Window is therefore timely and will end the physical back and forth taxpayers’ movement between different institutions and stakeholders in trade” Domitien Ndihokubwayo, commissioner-general, Burundi Revenue Authority (OBR) said. The system will enable traders to simultaneously submit information and administrative requirements for imports and exports at a single entry point on the Internet. The trade files can be attached in a range of formats including text files, images and tables. Once submitted, a clearing agent will no longer need to physically take documents from one government agency to another for processing but simply fill in necessary information on the web page. “The electronic process will enhance efficiency at the borders and is expected to contribute to 15 per cent reduction in time to import (or export) a container to Burundi from Dar es Salaam. It is also expected to contribute significantly to the 30 per cent reduction of the average time a truck takes to cross Kobero border post (within Burundi),” Trademark East Africa (TMA), which funded the programme with a $2.5 million grant said. The use of electronic documents will allow trade operators and border officials to expedite transactions and minimise human conduct...

East African member states have been advised to make critical assessment of single income tax rates. A law expert, Anatoly Nahayo said recently in Dar es Salaam after launching his book titled “East African Community Tax Harmonisation.” He said the move will ease allocation of capital shares within EAC member states especially mobile capital. “Member states should find ways to agree in this matter. Otherwise, it will be difficult to shift to a common market effectively,” he said. Elaborating, he said, currently, ministers of finance in the member states have been given power to exempt tax and no one has to judge. He also said the EAC member states should debate on tax harmonisation and put in place laws that will govern it. He said there are many challenges that need to be addressed so as to create fairness particularly in employment around the bloc whereby workers move from one country to another in search of a job. There are double charges recorded to the workers moving from one country to the other especially rates charged on pensions and charged in general. Nahaya explained that if checked, all workers moving to another country within the bloc will be charged the same tax rates. Nahana further said there is no democracy to protest the decision of finance ministers to exempt individual businessmen or company. “It’s high time our local experts addressed national issues in the EAC. Currently, there is no tax harmonisation in the regional bloc,” he said. On April 9,...

The impact of the deadly Ebola virus has fallen mainly on three African countries but tourism has taken a hit across the continent, tourism chiefs say. About 56 million people visited Africa in 2014, a two-percent rise from the previous year, according to UNWTO figures. However, growth lagged behind that in Europe, Asia and the Americas. And the increase was also down on the robust 4.8 percent gain a year earlier. "Africa has done well in spite of suffering from the Ebola symptoms which were associated unfairly" with Africa as a whole, UN World Tourism Organization (UNWTO) head Taleb Rifai said at the Berlin tourism fair (ITB) on Friday. Africa needed support, especially after the Ebola crisis, he said, adding: "It was very unfair the generalisation that happened." Marie France Adieme-N'Dja, of Ivory Coast's tourism office, said Ebola had created panic. "We have operators who have had cancelled bookings because of the fear of Ebola. However, in Ivory Coast there has not been a single case," she said. Showing off its nine national parks and 550 kilometres of sunny beaches, the Ivorian tourist office is one of many African stands at the ITB trying to woo back visitors as the epidemic appears to have been brought under control. Almost 24,000 people have been infected with the Ebola virus since December 2013, almost all in Liberia, Guinea and Sierra Leone, and 9807 of them have died, according to the WHO. The countries at the centre of the epidemic are forecast to...

China is set to be a key player in the financing of key Northern Corridor Integration Projects (NCIP), going by a recent resolution by East African Community member states. There are 14 projects under the NCIP, including the standard gauge railway. Other aspects include ICT, oil refinery development and fast-tracking the political federation. The 9th northern corridor summit held in Rwanda last week chose China to finance the projects. Ministers of Finance and Infrastructure were also directed to take the necessary steps to start the arrangements. They were told to consolidate the financial requirement, structure and mainstream projects, appropriations in the financial year 2015/ 2016 and subsequent national budgets. “The ministers are also directed to expedite the joint mission to China to source financing as per the directive for the NCIP,” read the summit’s joint communiqué. Finance ministries in partner states are expected to coordinate funding of the projects. The initiatives, if implemented, will have a significant impact on the lives of East Africans. South Sudan and lately Burundi will ultimately benefit from this renewed commitment to the EAC integration. In attendance were Presidents Uhuru Kenyatta (Kenya), Paul Kagame (Rwanda), Yoweri Museveni (Uganda) and South Sudan’s Salva Kiir. EAC chairman and Tanzania President Jakaya Kikwete, Burundi’s 2nd Vice-President Gervais Rufyikiri and Ethiopia’s Foreign Affairs Minister Tedros Adhanom attended as observers. President Kenyatta pointed out that greater inter-connectivity of the East African region would increase the ability of member states to trade with each other. Source: Daily Nation

Kenya: The Single Customs Territory (SCT) regime introduced by East African countries a year ago has reduced the cost of doing business by about 50 per cent in the East Africa region, according to Kenya Revenue Authority ( KRA). The system has reduced the time taken to move cargo across the region from 18 days to three between Mombasa and Kampala and 21 days to six between Mombasa and Kigali. Addressing Mombasa port users at a Mombasa hotel, KRA Chief Manager Customs Service Department, Ebby Khaghuli said it has taken political goodwill to achieve the high performance in cargo delivery in the East African Community (EAC). In a presentation on the SCT status, Ms Khaghuli said the new system was achieved through great sacrifice by the states because no consultants or donors were involved in the process. She said the human and financial resources were met by each customs administration. The system is being implemented by revenue authorities in Kenya, Uganda, Rwanda and Burundi amid protests from Kenyan clearing and forwarding agents who claimed it has cost them jobs and business opportunities. "An analysis in EAC region has shown that the SCT has reduced the cost of doing business by about 50 per cent since implementation and the time taken to move cargo across the region from 18 days to three from Mombasa to Kampala, and 21 days to six days from Mombasa to Kigali. It takes political goodwill to achieve what has been achieved in the EAC region," Khaghuli...

East African ministers and secretariat members hold 800 meetings each year. That is an average of three meetings each day, all aimed at navigating the complex nature of the East African Community’s integration process. For 11 years now, Kenya, Uganda, Tanzania, and more recently, Rwanda and Burundi, have been on a journey towards achieving regional political and economic harmony. Over this time, the value of the region’s combined product output has risen to Sh6.8 trillion ($75 billion), according EAC’s Secretary General Richard Sezibera. But behind the relative success of the process lie many missteps and criticisms. The most recent is the diplomatic tussle between Kenya and Tanzania on tour van access to airports and tourist sites. TradeMark Africa (TMA) is one of the institutions in a caucus of government ministries, development partners, civil society watchdogs and non-governmental organisations forming a support system for the EAC’s delicate walk towards regional integration. Business Beat sat with TMA’s Chris Kiptoo (country director) to discuss the integration process and the opportunities and challenges that exist. How far, in your opinion, would you say we are from achieving our regional integration goals. Considering the complexity and scope of the integration agenda, and the fact that integration requires ceding some degree of national sovereignty, the EAC partner states have made substantive progress in achieving regional integration goals. Indeed, EAC is often seen as one of the economic blocks that has made the greatest progress across the continent. The EAC region is now a common market, ushering...