Cooking gas is among products that will benefit from a special tax. PHOTO FILE | NATION
East African countries have agreed to remove the special
treatment given to “sensitive goods” and impose a Common External
Tariff on them starting from July 1, 2018.
According to EAC countries, such preferential treatment is not anchored in the law and is stifling intra-regional trade.
The
region’s Council of Ministers has also resolved that goods
manufactured from raw materials that are granted country-specific duty
remission should attract duties, levies and other charges provided in
the existing EAC-CET, effective July 1, 2017.
They agreed that removal of frequent stays of applications and duty remissions should inform the comprehensive review of the three-band CET
that is expected to be completed in September with an implementation of
July 1, 2018. Initially, the revised CET was scheduled to go live on
July 1 this year.
The Council of Ministers yielded to
requests by the partner states to grant special tax to over 80 product
lines in the 2017/2018 budgets.
Among the goods are raw
sugar, wheat, barley, motor vehicles, liquefied petroleum gas
cylinders, iron and steel products, crude edible oil, clothes, inputs
for the assembly of ships and raw materials and industrial inputs for
the manufacture of textile and footwear.
Kenya
and Uganda received a stay of application on a duty of 25 per cent
instead of 0 per cent on LPG cylinders for a period of one year. Rwanda,
Burundi and Uganda were allowed to apply a duty of 25 per cent instead
of 10 per cent on road tractors for semi-trailers for one year.
Burundi
and Uganda will charge duty rate of 10 per cent instead of 25 per cent
on buses for transportation for a period of one year while Kenya has
been granted duty remission on raw sugar at a duty rate of 0 per cent
for one year on condition that the finished product is not sold in the
EAC Customs Territory otherwise it will attract duty.
Increased requests
The EAC Secretariat noted that the increased requests for stays of application are undermining the CET and intra-regional trade.
The EAC Secretariat noted that the increased requests for stays of application are undermining the CET and intra-regional trade.
In addition, the stays of application do not have a legal foundation in the EAC Customs law.
Tanzania
said the increasing requests for stay of applications and duty
remissions have defeated the logic of the Customs Union. The list of
goods has been expanding and thus creating trade distortions and
impeding intra-region trade.
The review of the current
EAC CET is under way. A team of consultants from the partner states has
already endorsed the criteria for the classification and categorisation
of goods within the EAC CET.
The
ministers for finance in April 2014, decided to do away with stays of
applications and directed that a phase out proposal be developed, which
was subsequently adopted by Sectoral Council of the ministers of trade,
industry, finance and investment in May 2014.
According
to the EAC Secretariat, the intra-regional trade is declining since
2015, which could be attributed to the increasing restrictions imposed
by partner states on country specific stays of application and duty
remission.
No comments :
Post a Comment