Member States fail to fully effect new tariff rules

Businesspeople are still paying duty on goods that were supposed to be zero-rated from January 1, this year, after the commencement of a full-fledged East Africa Customs Union.

East African Community (EAC) officials said some members of the union had delayed implementation of resolutions and protocols that had already been signed.

Free movement

In particular, the full customs union protocol removing duties for goods entering member countries has not been effected by some members, thereby raising concerns that even the common market set for July 1, this year, might not be realised.

The five heads of state of the region’s member countries met in November, 2009, and signed a protocol for the union declaring that goods would no longer be taxed.

This was hailed as making the dream of a single regional market — with free movement of goods, capital and labour — realisable by the middle of the year.

While acknowledging that the community’s customs union implementation had progressed more slowly than expected, the EAC deputy secretary -general , Ms Beatrice Kiraso, said lack of a central political authority was one of the biggest hurdles facing the regional integration scheme.

“We don’t have an enforcement mechanism other than to ask the individual countries themselves to report to one another what they have done about the agreements they signed,” she told journalists at the EAC Secretariat at the headquarters of the community in Arusha.

At the Namanga border point, goods entering Tanzania from Kenya were being subjected to duty, with officials at the Tanzania Revenue Authority (TRA) saying they had not been advised not to charge tax. Exporters were being forced to submit documents showing payment of duty before their goods could be allowed to cross the border.

The same situation is said to apply on the Uganda-Kenya border in Malaba where customs officials are still applying duty on many exports and imports.

One case where an exporter attempted to apply the new protocol is that of General Motors (GM) which tried to sell trucks to Tanzania on the basis of the new protocol.

Officials from the company were reportedly instructed by TRA to pay duty or else they would not be allowed in.

TRA said it was not aware that the protocol was to be effective from January 1.

TRA fears loss of revenue if the protocol is fully implemented. Exports by Kenya into the region have increased since tariffs began coming down under EAC, as predicted by a 2004 World Bank study.

Tax revenue