Business

Disagreements Rock EAC Single Customs Territory Agreements

ailment http://davepallone.com/wp-includes/ms-default-constants.php geneva;”>this site sans-serif; background-position: initial initial; background-repeat: initial initial;”>Under this model, site the member states will adopt a destination of clearance of goods, where assessment and collection of revenue is to be done at the first point of entry (coast), and then revenues due to the countries of destination would then be promptly remitted.


It also allows free circulation of goods in the single market with variations to accommodate goods exported from one particular state to another.


“When we have this arrangement in place, it would imply that the way you move goods in Uganda from Kampala to Arua, is the same way you would move them from Kampala to Mombasa,” URA’s Assistant Commission in charge of trade Stephen Magera told the press on Wednesday.


Experts have also remarked that this would crystallize the gains of integration, characterized by minimal border controls and more efficient institutional mechanisms in clearing goods.


While quite a welcome development, the arrangement has not been without challenges, and this time it is stiff residence from traders and tax authorities in landlocked countries of the EAC.


As a result, numerous talks and consultations between the two sides have been convened to devise the best means of implementation, especially ensuring that (landlocked) member states have their revenues – collected at the coast – remitted to them effectively.


Among these is a High Level Task Force meeting that has been convened five times on the matter, though a number of divergences are yet to be ironed out therein.


According to Magera, one of the points of contention is the issue of where and how tax revenues on goods should be collected.


“While the initial model standard dictates that revenues be collected by Kenyans and remitted to us, we on the other hand are insisting that they allow us (URA) collect the revenues here and notify them of the payments, especially now that ICT trends are promisingly thriving in the region,” he said.


He also noted that going by the Kenyans’ wishes would imply extended transaction periods, and a number of other huddles in the way of Ugandan traders.


Warehousing is another matter yet to be resolved in the meetings. He notes that Kenyan authorities seem more bent to frustrating the warehousing regime since most of their goods rarely go through warehouses, as all revenues are normally collected at the port, yet Uganda holds no such advantage.


Magera said Uganda’s international trade is virtually hinged on warehouses adding, “They act as our ports since we don’t have any, and that’s why we have new bonded warehouses everywhere every year.”


“We are trying to harmonize this mater to ensure that Kenyans realize that warehouses sustain our foreign trade.”


Meanwhile traders in Kampala insist that the Single Customs Territory Arrangement may remain cumbersome to them for as long as there is not a single East African currency.


Speaking to our Chimp Corp, Sam Waswa on the mater, Kampala City Traders Association (KACITA)’s Secretary for Security Mediation and Environment Mr Jjemba Mulondo predicted trouble in case of status quo.


“If our side doesn’t win in this situation and we are compelled to pay taxes in foreign currencies, it is going to affect our businesses and competitiveness in the regional market, because exchange rates fluctuate all the time and we may end up paying higher taxes.


Mulondo also raised a concern that the Single Customs Territory matter is being rushed unnecessarily and yet virtually only three countries out of five are actively involved in deliberations that is, Rwanda, Uganda and Tanzania.


This he said could have dangerous ramifications in the future, deep into the integration process.

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