UGANDA MULLS ITS OWN TAX LAW CITING SLOW PROGRESS IN EAC INTEGRATION.

Junior Finance Minister in charge of Planning, Matia Kasaija.

Uganda is mulling a review of the East African Excise Management Act that would allow it to claw back the right to collect taxes from institutions of the EAC and instead vest them with the Commissioner General of the Uganda Revenue Authority (URA).

In a signal Uganda was losing patience with the slow pace on implementation of a common tax regime, it has proposed amendments requiring the powers for tax refunds or rebate taken away from EAC customs officials and given to the Commissioner General of URA.

In the case of failure to pay tax and its interest, the word “Community” is being replaced with the Uganda government.

Under the East African Excise Management Act, a throwback to the first EAC that collapsed in 1977, Uganda’s Customs duty was collected at entry ports manned by its partners in Kenya and Tanzania. 

The law was replaced by the East African Customs Union Management Act (EAUMA) 2005, which provided for a single tax collection centre for the region, Uganda is concerned that seven years later, it is yet to come into force. 

Uganda is apparently also not satisfied with Kenya’s refusal to allow it to post its revenue officers at Mombasa. 

According to the Junior Finance Minister in charge of Planning, Matia Kasaija, while the process for common taxation is ongoing and there is a project to establish a common tax collection centre, progress has been hampered by a lack of trust.

“We failed to agree on who collects taxes for us; we cannot trust Kenya to collect because we don’t know how long it would take for them to remit our share of the taxes,” said Mr Kasaijja.

Mr Kasaijja said Uganda had wanted to place its own tax collectors at the common collecting point but this was rejected. He added that this problem can only be solved when we are one country, a sentiment that observers of the EAC integration agree with.

Lydia Wanyoto, a former member of the East African Legislative Assembly, said the common taxation regime has failed because countries view revenue as a sovereignty issue and no one is willing to give up this important aspect.

URA Commissioner General Allen Kagina said the new law will cater to internal taxes as the Customs Union deals with external taxes.

It is understood that Uganda is also finding it difficult to use fiscal policy to direct policy and giving up on some taxes that have been abolished under the Common Market.  For instance, while other EAC members allow contractors to re-export machinery without paying any taxes, Uganda levies taxes.

via The East African