Tax experts from all member states of the East African Community (EAC) will next month meet to discuss harmonization of domestic taxes in the regional bloc.
The two-day meeting that is organized by the East African Business Council (EABC) in collaboration with the EAC Secretariat, will take place from November 11in Arusha.
Tax harmonization is part of the EAC integration agenda where partner states agreed to harmonize their monetary and fiscal policies with the key objective of eliminating tax distortions, to effect a more efficient allocation of resources in the common market and enhance trade.
Celestin Bumbakare, Commissioner for Domestic Taxes at Rwanda Revenue Authority, who will attend the conference, noted that various rates of Value Added Tax (VAT) and tax incentives affect foreign investors, adding the harmonization of domestic taxes will attract more investors.
“It’s important to harmonize our domestic taxes to avoid distortions. For example, if a foreign investor finds that we have high VAT compared to other regional members, he will not invest here, but instead go where there are tax incentives and lower VAT,” he noted.
The RRA Deputy Commissioner General, Richard Tushabe, pointed out that the main objective of synchronizing the regional domestic taxes is to avoid the harmful tax completion.
“When taxes are not harmonized, it creates imbalances and in this case, some countries will benefit while others will be at a disadvantage,” said Tushabe, who is also the Commissioner for Customs Services.
The core substantive elements of the workshop will be interactive plenary and breakout sessions, discussing private and public sector views on the best principles to underlie each category of the taxable goods in terms of harmonization.
Over 150 participants from all member states are expected to attend the meeting that will be opened by Tanzanian President, Jakaya Kikwete.