Finance and Economic planning Cabinet Secretary ,John Mbadi has urged East African Revenue Authorities to Boost Tax Harmonization and Revenue Collection.
The CS called on revenue authorities to intensify efforts in tax harmonization and improve revenue collection to keep pace with the region’s economic growth.
He was addressing Commissioners General and Directors General during the 52nd East African Revenue Authorities Commissioners General Meeting held in Nairobi.
He said that while East African Community (EAC) economies grew by 5.8% in real terms and 14.5% in nominal terms in the 2023/2024 financial year, tax revenue growth lagged at 13.3%.
“This disparity underscores the need to reassess our tax policies and administration strategies to broaden the tax base and boost revenue collection,” he said.
The Cabinet Secretary.
underlined the importance of tax harmonization in achieving common policy goals.
He explained that harmonizing tax systems across the region would promote trade and investment, remove distortions, improve transparency, and increase revenue collection.
While customs tax statutes have been harmonized under the Single Customs Territory, the harmonization of income tax, VAT, excise tax, and tax procedures is still underway.
Significant progress, however, is being made, including drafting a Harmonized Tax Procedures Directive, which will unify tax procedures across EAC countries.
“This directive will provide greater certainty for taxpayers and facilitate cross-border trade,” Hon. Mbadi said.
He also emphasized the critical role of revenue administrations in trade facilitation. He lauded the ongoing Regional Time Release Study, supported by the World Customs Organization (WCO), which seeks to enhance efficiency at border points along the Northern and Central Corridors.
A technical working group is currently meeting in Nairobi to finalize the report.
The meeting brought together top revenue officials from Burundi, Rwanda, South Sudan, Tanzania, Uganda, Zanzibar, Kenya, the Democratic Republic of Congo, and Somalia, alongside representatives from the EAC Secretariat.
Hon. John Mbadi urged participants to strengthen regional collaboration, noting that a unified approach would create a more favourable business climate and drive economic growth across the region.
“There people who do business in our jurisdictions, make profits but the tax that they pay to us is minimal so that we must correct and make sure that every person who benefits from our infrastructure , who is supported by our economies should pay a fare share of taxes just like the domestic companies pay’’
“What we need to do is to come up with policies that broaden the tax base and ensure that all the people who need to pay tax pay tax and then have systems that can help us to actualize the same to enhance tax visibility , and then the revenue that is collected is utilized properly”.
“A lot of our economies are driven by the informal sector so we need to come with solutions on how to broaden the tax base especially on this hard to tax sectors of the economy.”
“If we get a few a things done differently, if we get our domestic revenue mobilization right, then we don’t have to stress ourselves going to look for money elsewhere .And I am sure what is obtaining in Kenya is obtaining elsewhere in the region”
