East African Community member states are meeting in Entebbe, Uganda, this week in a desperate attempt to agree on a common position on how to tax goods entering the region. This comes ahead of the regional budget reading set for June.
The EAC Heads of State, in February, directed the Council of Ministers to review the relevant rules and harmonise the common external tariff (CET) in three months. Implementation of a new tariff structure is behind schedule by almost two years.
Currently, finished goods imported into the bloc attract a duty of 25 per cent, intermediate goods 10 per cent and raw materials 0 per cent under the EAC’s existing three-band tariff structure, which came into effect on January 1, 2005.
In addition, there is a list of sensitive items such as sugar, wheat, rice, garments and milk, which attract higher duty of above 25 per cent with the aim of protecting local industries from competition.
The EAC Sectoral Council on Trade, Industry, Finance and Investment in a meeting held in Arusha in May 2016, directed the EAC Secretariat to finalise the comprehensive review of the CET by December 2016 for implementation from July 1, 2017.
But member states failed to meet this deadline, prompting a three-month extension to September 30, 2017, with implementation from July 1, 2018.