Campaign for uniform VAT across East Africa

HEADNOTE

Tax

East African tax experts want finance ministers in Kenya, Tanzania and Uganda to harmonise VAT (value added tax) charges in the region. They say the different rates cause headaches and confusion across the East African Community. Kenya charges

VAT at the rate of 16% on manufactured goods while Uganda and Tanzania levy the tax at 20% and 18% respectively. Kenya's low VAT rate has become a source of friction among national tax authorities of the Community's member states. The cost of manufactured goods is in constant turmoil as traders flock from one country to another to buy goods or services. "Harmonising VAT among EAC members will be a good show of Kenya's commitment to the regional integration project," says Martin Kisuu, a partner at financial services consultancy Deloitte. Such a move is expected to reduce the cost of goods manufactured in the region to par. Deloitte has also suggested that ministers introduce tax refunds for tourists to encourage return visits.