East African Community (EAC) member States are to blame for the delay in the harmonisation and standardisation of the region’s tax system, an industry expert has said. Ashif Kassam, the executive chairman of RSM Ashivir, says the regional trading block is losing time on the elimination of double taxes. “Tax policies should be common to each of the partner States. It is important that governments move with speed to avoid losing time. Let us standardise our tax systems, ease movement of labour and eliminate double tax elements. Let us implement the double tax system,” he said at the sidelines of the ongoing East African Business Summit in Kigali. Mr Kassam called for enhanced pace of integration, but warned that plans to establish a common currency should be carefully thought out to avoid mistakes that have happened in the European Union. “We already have a Single Custom Territory. My concern is in the implementation of the Single Monetary Union. We are at different stages of development as a region. We have different tax collection systems and having a common currency will be a big risk like what happened in European Union and the economic recession. However, let us do the rest of integration quickly,” he said. The tax expert emphasised that differences in tax regimes and particularly in the rates and how governments administer the levies needed to be addressed. In Kenya Value Added Tax (VAT) is charged at 16 per cent while Tanzania, Uganda, Rwanda and Burundi charge the tax...

President Uhuru Kenyatta and his Rwandan counterpart Paul Kagame have challenged East African Community member States to open their boundaries for free movement of goods and people in order to fully realise regional integration. The two heads of State said fears that opening up of borders would see some countries out-compete others are “primitive and unfounded.” Speaking at the launch of the Sixth East African Business Summit in Kigali, the two Presidents said political will is required to fully integrate the region. “Let us be frank with each other; we have not been able to move fast because of national fears, a sense of insecurity that if one opens up their people will be denied jobs and other opportunities. “We must deal with these fears. We need to start talking about our people being the East African people. Kenya and Rwanda have made progress on this. “We have been clear on opening up our labour market to take full advantage of the labour that is available in the east African region,” Mr Kenyatta said while answering questions from KCB chief executive officer Joshua Oigara. President Kagame, who hosted the event, said Rwanda is not just allowing east Africans to set up business and work in the country but dealing with the issue of wrong mentalities. “We have unwarranted worries. We have experimented this in Rwanda. When we opened our borders, removed restriction on work permits and visas, everyone benefited. We have benefited,” Mr Kagame said. He said some Rwandans had...

The recent closure of manufacturing plants in Uganda and Kenya are a wake-up call for the need to cut red-tape and invest more in energy and transport infrastructure in order to keep the region’s industrial output and jobs alive, the chair of the East African Business Summit said on Thursday. Mr Linus Gitahi said the closure of the BAT tobacco plant in Uganda, as well as Eveready batteries and Cadbury chocolate factories in Kenya are a reminder of the work required to keep businesses in the region competitive. “How can we compete with Egypt, where the average cost of electricity is $0.03 per kilowatt if our power continues to cost an average between 10 and 13 US cents?” Mr Gitahi asked at the summit in Kigali, Rwanda. Mr Gitahi, who is also the chief executive officer of Nation Media Group, acknowledged the investments currently underway in transport and energy infrastructure in the region and said East Africa “is more peaceful, more prosperous, healthier, better educated and more united than it was a decade or two ago”. HARMONISE POLICIES However, many challenges remain, he said, including the need to harmonise tax policies, improve the quality and mobility of labour, and ensure that prosperity is more evenly distributed across East Africa. Mr Gitahi said: “We must be reminded of one of the great challenges of our times: inequality. How do we ensure that our prosperity is inclusive and lifts all boats? "I am reminded of the saying – it must be from...

President Uhuru Kenyatta and his Rwandan counterpart Paul Kagame have challenged East African Community member States to open their boundaries for free movement of goods and labour in order to fully realise regional integration. They said continued fears over competition “is primitive and unfounded.” Speaking at the launch of the sixth East African Business Summit in Kigali, the pair said political will is required to fully integrate the region. The summit is organised by Nation Media Group, Citi Bank, KPMG, Deloitte, Price Water house Coopers and Serena Hotels. “Let us be frank with each other, we have not been able to move fast because of national fears, a sense of insecurity that if one opens up their people will be denied jobs and other opportunities. Deal with these fears “We must deal with these fears. We need to start talking about our people being the East African people. Kenya and Rwanda have made progress on this. We have been clear on opening up our labour market to take full advantage of the labour that is available in EA region,” Mr Kenyatta said while fielding questions from Kenya Commercial Bank chief executive officer Joshua Oigara. President Kagame, who hosted the event, said Rwanda is not just allowing Kenyans and other East African to set up business and work, but also dealing with the question of mentality and fears that some people tend to have. “To increase trade, it is not only as a result of exporting raw materials but on basis...

Government and business leaders from East African Community are today expected in Kigali to discuss mechanisms of how to fast-track regional development and inclusive growth. The sixth East Africa Business Summit (EABS) brings together more than 100 regional top executives and policy-makers. President Paul Kagame and his Kenyan counterpart Uhuru Kenyatta are expected to officiate at the summit, according to organisers. The business leaders are expected to discuss the East African fiscal policies and practices, regional labour policies and management of the region's natural resources, including minerals. According to a statement from EABS, the two-day summit will also lay a foundation for a more concrete public private partnership toward achieving a quantum leap through wealth creation and competitiveness. The summit will also highlight pertinent issues affecting the business environment in the region, including that of business and work permits. "What we are looking for is more acceleration to realise the objectives they have set up for the businesses," Joshua Oigara, the chief executive of Kenya Commercial Bank, said at a media briefing yesterday."We would also like to see strong engagement from the businesses. It is not necessarily the public sector or the government initiative." The summit has also attracted several ministers from the region, including Valentine Rugwabiza (East African Affairs), Francois Kanimba (Trade and Industry), Kenya's Cabinet Secretary for Industrialisation and Enterprise Development, Adan Mohamed, his energy counterpart Davis Chirchir, and Tanzania's labour minister Gaudentia Kabaka, among others. EABS is a joint initiative of Citibank, Deloitte, KPMG, Nation Media Group,...

NAIROBI, Oct. 14 (Xinhua) -- The Kenyan government said Tuesday talks between the East African Community (EAC) and the European Union on the new Economic Partnership Agreements (EPAs) have been concluded and the deal has been signed. "Ministry of Foreign Affairs and International trade is pleased to announce that negotiations for Economic Partnership Agreements (EPAs) with the European Union were today finalized and signed in Brussels, Belgium," said a statement from the ministry of foreign affairs and international trade, adding that the successful conclusion of the negotiations will enable Kenya to continue enjoying duty free, quarter free access to the European market. EPAs are free trade agreements EU is negotiating with countries in Africa to steadily do away with tariffs on almost all African exports into European market. Kenya was engaged in the EPA negotiations within the framework of the EAC. The EU is the destination for 60 percent of exports from the African, Caribbean and Pacific region. Kenya's fresh produce exporters started paying taxes from Oct. 1 on goods entering the EU as a previous talk did not reach an agreement, because Kenya has a relatively strong industrial and manufacturing base, and could not fall in the Least Developed Countries category for the EPAs. Source:: Global Post

NAIROBI -The East Africa Community ( EAC) Partner States will have a harmonized tax system by April 2015, a senior Kenyan government official said on Monday. Cabinet Secretary in the Ministry of East African Affairs, Commerce and Tourism Phyllis Kandie told a media briefing in Nairobi that negotiations are currently ongoing at the ministerial level. "We shall begin by harmonizing the Value Added Tax ( VAT) and the excise taxes," Kandie said during the launch of the 2014 Taxpayers week. Tanzania, Uganda and Rwanda have a VAT rate of 18 percent, while Kenya's figure stands at 16 percent. The economic bloc also has different levels of taxation across same industries. Kandie said while Tanzania has suspended levying tax on its tourism sector, Kenya has introduced VAT on the sector. "What is important is that we have agreed as a region on the need for uniform tax systems across the five partners' states," she said. Kandie noted that tax harmonization will make cross-border trade easier for the private sector. "Our aim is to ensure that intra- EAC trade reaches the level of other trading blocs such as the European Union (EU)," she said. Kenya Revenue Authority (KRA) Commissioner General John Njiraini said the best approach to harmonization of EAC taxes is implementation in phases. "The first step is to agree on the maximum and minimum limits allowed for the taxes," Njiraini said, noting that there are differing tax administration practices across the EAC states. "All the region's tax agencies will need...

DAYS are numbered for rogue clearing and forwarding agents who have masqueraded at the country's main entry ports as genuine professionals handling customers' cargo. Later this month, President Jakaya Kikwete is expected to launch a Federation of East African Freight Forwarders Association (FEAFFA) professional training and certification ceremony. According to FEAFFA Vice Chairman, Stephen Ngatunga and Executive Director, John Mathenge, President Kikwete will launch a campaign to professionally train C&F agents in the region which in future may be a pre-requisite before getting licensed. Messrs Ngatunga and Mathenge said for the past two years, FEAFFA has trained some 4,500 C&F practitioners who have qualified for the awarding of East African Freight Forwarders Practitioner's Certificate in the region. In Tanzania alone, over 1,300 practitioners have undergone the training which was initiated in 2012 thanks to funding from Trade Mark East Africa. Among other key goals for the professional training programme which will continue until such time that all C&F agents get the requisite skills, is to improve quality of services being rendered. It is very clear that in Tanzania, the family of C&F has a good number of unwanted elements who have at times, colluded with port and revenue officials to steal clients goods or cheat on taxes. Former Tanzania Freight Forwarders Association President, Otieno Igongo worked hard to ensure that the local C&F discipline is composed of professional personnel of good standing. Mr Igogo who handed over the TAFFA presidency to Ngatunga over two years ago, is credited with organizing...

East African Community member states Tuesday reached an agreement with the European Union which effectively shields the region’s exports to Europe from heavy taxation. The deal means that Kenya’s horticultural products can compete favourably in the European market, as a result of which over 150,000 jobs that were at risk will now be saved. It also means that Kenyan companies will not suffer losses in earnings running into over Sh1 billion a month, which was under threat if the deal had collapsed. Last evening, the Ministry of Foreign Affairs said the two sides signed an agreement following two days of negotiations over three key issues of taxes, subsidies and previous agreements affecting trade between the two blocs. “The three areas that remained outstanding namely: Export taxes, export subsidies and relationship between Cotonou Agreement and EPAs were all agreed upon in favour of Kenya,” said a statement from the ministry. “The successful conclusion of the negotiations will enable Kenya to continue enjoying duty free/quota free access to the European market.” The deal means that Kenya can start enjoying duty-free exports of fresh vegetables and flowers to the EU markets if it implements the agreement in the next two months. But having been signed beyond the deadline date of October 1, it also means that flower exporters will continue pay duty on their exports to the EU until the deal is ratified. FREEDOM TO TAX The two sides had failed to agree on what language to use in the agreement known as...

KAMPALA, Uganda, Oct. 13, 2014 /PRNewswire/ -- A Chinese construction company, China Harbor Engineering, has been contracted to build a $13.5b railway to offload the region with costly and slower transport. The standard gauge railway line that will stretch from Kenya to Kampala, Uganda's capital, is expected to bring down journeys to only two days, from the current eight. The line will also be extended to Rwanda. Studies on Kampala-Kigali segment started in July - to be complete by July 2015. The cost of this segment is estimated at $1.2b. The 2,000-kilometer line will ease transport of goods from Rwanda, DR Congo, South Sudan, and Uganda, heading to Kenya's Mombasa port on the Indian Ocean. Trains carrying heavy weights will be travelling at 120km/h, fostering speedy imports and exports. The whole project is expected to be complete by 2018, costing $13.5b. China Exim Bank is among the main financiers. On October 8, Presidents of Rwanda, Paul Kagame, Yoweri Museveni of Uganda, and Salva Kiir of South Sudan launched the construction activities in Kampala. They also discussed other regional infrastructure projects including energy. President Kagame said continued integration will eliminate all bottlenecks to business. "We have a clear chance of being where we want to be and shortening the time to get there," said Kagame. President Museveni for his part said: "We are here to launch our region into a new era of cheaper transport and cheaper electricity." Understandably, for Rwanda, a landlocked country, it has a lot to benefit. Jules...