Feb 9, 2023

Mawazo Writing Africa

Writing about the main

Tax disputes, trade wars headache for new EABC board

The East African Business Council (EABC), which elected a new executive committee last week, says it will accelerate the formation of a Trade Aids Committee to handle disputes and reduce disruption in the East African Community (EAC) Common Market.

The team, elected on the sidelines of the Commonwealth Heads of Government meeting in Kigali, comes at a crucial time when EAC partners are at loggerheads over trade rules and Rwanda and the Democratic Republic of the Congo have everything but closed borders to trade over security concerns amid violence attributed to resurgence of the M23 rebel group.

Executive Committee

The new private sector lobbying team, led by Tanzanian Von Angelina Ngalula is expected to resolutely address tariff and non-tariff barriers (NTBs) that impede regional trade.

D he Executive Committee was due to meet Ugandan President Yoweri Museveni on June 30 amid threats from Kampala to withdraw a tariff in retaliation for a trade war with Kenya over agricultural products has been blamed on Nairobi’s persistent imposition of tax measures on Uganda’s exports.

< p>Read:Trade war looming over Kenyan tax on Ugandan eggs

“We face so many challenges in accessing markets for Ugandan goods in Kenya.

“In fact, Uganda is trying to pull out of the tariff relief system, but we are working to keep them there,” said Simon Kaheru, chair of the Uganda EABC chapter, who has been retained as vice chair of the council.

” Uganda has a surplus of industrial sugar, but there is nowhere to sell it. The same goes for milk and other commodities,” he added.

If Ugandan producers exit the tariff remission system, there would be far-reaching implications for trade within the EAC, as no country would have a mandate to collect import revenues.

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“Some of our products, despite their high value and low price, do not have access to the regional market. Some of our neighbors are violating our Customs Union and Common Market principles,” complained Tony Gadhoke, CEO of Mukwano Industries, when EABC Managing Director John Bosco Kalisa visited the company in Kampala on June 29.

“ We are calling for the lifting of the suspension of NTB applications, the revision of the EAC cooking oil rules of origin and the electronic promulgation of a nationwide tariff remission system,” said Mr. Gadhoke.

Breaking Rules

Mr Kalisa, who also met with Ugandan producers, expressed concern about the way the trade disputes between Kenya and Uganda have been managed.

“We are currently in Uganda and there are complaints that The Kenyan authorities always impose tax measures on Ugandan imports without major consultation,” he said.

Kenya has imposed new taxes on poultry, eggs, milk, sugar and other Uganda in violation of EAC regulations ical products are levied.

“Fresh produce from Uganda should enter the Kenyan market without any disadvantages.

“But they impose tax measures without consulting them and that is not good for bilateral trade or even domestic trade,” said Mr. Kalisa.

Read:Private sector demands uniform taxation in the EAC

President’s family share Uhuru Kenyatta in Kenya’s dairy sector is believed to be one of the main reasons behind the three-year trade dispute.

But no evidence of Presidential interference in the trade has been presented.

Kenya now taxes Ugandans Eggs with a tax of Ksh72 ($0.6) per shell, which yields a $0.6 levy, was suspended last December after bilateral talks.

The move has Ugandan traders and Kenyan traders Consumers upset as the price of eggs in Kenya has dropped thanks to the imposed excise tax of 25p per cent.

< p>A tray of eggs is now Ksh450 ($3.82) in Kenya, up from Ksh360 ($3.05) two weeks ago as traders speak of shortages.

In retaliation for Kenya’s new tax measures, Uganda has also refused to allow Kenyan juice onto its market.

Since November 2017, Kenya has complained that, for example, Del Monte pineapple juice in Uganda is still subject to an excise tax of 13 percent.

< strong>Read:Disharmonized taxes blamed for unfair trade with EA

Pineapple juice series

Uganda argued that it is difficult to distinguish between pineapple juice made with local concentrate and juice made using concentrate imported under duty waiver for export.

In the EAC, duty is exempt if the core ingredients are locally produced

Uganda argued that Del Monte pineapples could not be given preferential treatment ed juice and requested an amendment to this NTB as Kenya also levies excise taxes on Ugandan juices.

On 14 June, the EAC Secretariat reported that Uganda wanted the matter to be referred to the Sector Council for Trade and Finance solution.

Uganda has also imposed an excise tax on Kenyan manufactured goods, including pharmaceuticals.

While the trade war between Kenya and Uganda threatens to escalate, another is brewing between Rwanda and Tanzania.

Also read:Tanzania reaping the spoils of Uganda’s trade wars

Rwanda has complained since 2018 about numerous fees being levied on milk exported to Tanzania , which are collected by various institutions such as the Tanzania Bureau of Standards, the Tanzania Food and Drugs Authority and the Tanzania Dairy Board.

To import one kilogram of milk to Tanzania, the government now charges 2,000 Ts h ($0.86) instead of Tsh 150 ($0.064).

This is a 1,233% increase under the Animal Diseases and Animal Products Movement Control Ordinance published on August 31, 2018 (Government Notice #476) , which came into effect on October 1, 2018.

Rwanda says this amounts to a total ban as imported milk cannot compete with domestic milk.

The dispute has yet to be resolved

All eyes will be on the EABC, especially as it plays a key role in these disputes, the Executive Committee sits.

Tanzania Trade War

Also between A trade dispute is raging between Uganda and Tanzania. Uganda does not recognize the Oil Tank Calibration Certificate issued by the Weight and Measures Agent (WMA) from Tanzania. As a result, Tanzanian traders are being forced to undergo recalibration by the Uganda Bureau of Standards at a cost of US$230. This increases the cost of doing business.

There are also disputes between Tanzania and the rest of the EAC partner countries over work permits.

Dodoma charges a $250 business visa fee for EAC businessmen applying for Entering Tanzania is levied at all borders as a certificate of temporary posting, contrary to the EAC Community Market Protocol on the free movement of persons throughout the region.

The fee is levied on persons visiting Tanzania for temporary posting ( economic activities and professional services) such as consultancy.

Tanzania has been requested to abolish the fee for East African citizens under Regulation 5 of the EAC Community Market Protocol.