Harmonization of Tax Policies in East Africa: Key Highlights from EABC-PwC Webinar

Addressing stakeholders at the East Africa Business Council (EABC) – PwC webinar on Pre-Budget 2024/25, Mr. John Bosco Kalisa, EABC Executive Director, emphasized the urgency for Governments to streamline EAC macro-economic goals and domestic taxes to enhance business predictability and stimulate intra-EAC trade and investment. 

The webinar shed light on the discrepancies and overlaps in tax proposals across EAC member states, particularly focusing on corporate tax rates, withholding taxes, VAT, and excise duties. 

Key disparities include variations in corporate tax rates (30% in Tanzania, Kenya, and Uganda, 28% in Rwanda), withholding tax structures, and VAT rates on local goods and services. 

Moreover, the webinar underscored the need for alignment with the budgetary cycle in EAC partner states to facilitate timely engagement with the private sector for effective advocacy of fiscal proposals. 

Proposals from PwC experts and the private sector aimed at enhancing the trade and investment environment include tax administration streamlining, reduction in corporate income tax rates for SMEs, and modernizing excise duty regulations. 

The implications of tax proposals outlined in the Finance Bills of Kenya, Uganda, and Rwanda were discussed, emphasizing potential impacts on cross-border trade and investments. 

The webinar, attended by over 150 key stakeholders, emphasized the importance of harmonizing the domestic tax regime to foster intra-EAC trade and investment while addressing existing tax disparities. 

Despite efforts such as Pre-Budget Consultations among EAC Ministers of Finance and Economic Planning, full harmonization of the tax regime within the EAC remains a work in progress, especially concerning domestic taxes like VAT, Excise Duty, and Income Tax. 

Overall, the EABC-PwC webinar served as a crucial platform for the private sector to prepare for the fiscal year 2024/25 and advocate for policies conducive to business growth and regional economic integration.