Reprieve as taxman suspends railway levy on EAC imports
What you need to know:
- The business lobby also called on Tanzania and Burundi in January to bridge a rift that had emerged in the East African Community by adopting the policies being implemented by Kenya, Uganda and Rwanda.
The Kenya Revenue Authority has suspended the 1.5 per cent railway development levy on all imports to Kenya from East African Community member states.
The move comes after regional traders filed a complaint with the EAC Council of Ministers, saying the levy went against the EAC common market agreement.
In a letter seen by the Sunday Nation, KRA has directed all its offices to stop imposing the levy on goods entering Kenya from the other four member states.
“To ensure compliance with the laws of the community as provided under Article 39, all officers are required to immediately stop imposition of the railway development levy on any goods imported to Kenya from the EAC partner states,” Commissioner of Customs Services Beatrice Memo, said in a letter to KRA’s State debt collection staff.
Last month, a regional business lobby called on its members to inform on the implementation to ensure that the council’s decision was upheld and implemented.
The East African Business Council (EABC) noted that the 1.5 per cent levy imposed on imports was inconsistent with the EAC Customs Union Protocol, because it is a charge of equivalent effect which partner states agreed to remove.
Last November, the Council of Ministers met and resolved to direct the Kenya government to abolish the levy, a directive that has since been upheld, allowing goods originating in the EAC to be exempted from the levy.
At the beginning of the year, the EABC vowed to fight for improved business environment in the EAC by engaging policy makers at different levels, including technical committees of the community, its organs and institutions, the office of the Secretary General, the Council of Ministers and the Summit of the EAC Heads of State.
The business lobby also called on Tanzania and Burundi in January to bridge a rift that had emerged in the East African Community by adopting the policies being implemented by Kenya, Uganda and Rwanda.
In a statement, the EABC asked the two countries to adopt the use of national identity cards as travel documents and to begin issuing the bloc’s single tourist visa.
The council is scheduled to meet Tanzanian President Jakaya Kikwete on March 29 to present the identified priority issues affecting business growth and development of the private sector within the community.
The council will also make recommendations on how to improve the business environment in the region to grow intra-EAC trade.
“We will also take time to raise the key issues affecting the business community, particularly with regard to doing business in Tanzania as a follow-up to the meeting with trade facilitation agencies held in Dar es Salaam in July 2013,” reads a statement from the Council.
The delegation will be led by EABC chairman Vimal Shah and directors from all the five countries. It will also include business leaders from EAC partner states.
