Kenya - Tax Authorities driving East African Community (EAC) Integration
The Kenya Revenue Authority (KRA) leadership is back in Nairobi from the 47th East African Revenue Authorities Commissioners’ General (EARACG) meeting at Club Dulac in Bujumbura, Burundi. Key outcomes from the forum included all revenue authorities recording an average 11% growth between July to December 2019 despite facing common challenges like fraud, smuggling and delayed implementation of policy measures due to bureaucratic challenges.
The CGs deliberate on a variety of strategies to enhance revenue performance and trade facilitation in the EAC, signing off a communique guiding the implementation of key strategies. A key directive included all revenue agencies jointly conducting a review of the performance of the Single Customs Territory (SCT) in terms of the whole value chain of imports and transit goods. The CGs agreed to establish a joint EAC
member states team to analyse transits from the point of entry to the destinations to eliminate dumping and transit cargo diversions. Also on the task-list was for agencies to establish a common framework for identifying small taxpayers and guidelines for graduating the small taxpayers to medium and large taxpayers’ category with an aim of broadening the tax base. The utilisation of additional tax regimes, including presumptive tax, Turn Over Tax and Withholding, to broaden and enhance tax collection was also discussed and agreed upon.
Other priority areas will include adopting a joint approach to development of a data governance policy to promote data-driven tax compliance; continuous engagement with the EAC to establish a committee in Tax Affairs as an EAC Organ where all domestic taxes and non-customs related matters can be addressed; and mobilizing EAC support to shape policy direction on the Common External Tariff (CET) for efficient trade facilitation.
The CGs also re-emphasized the role of integrity in revenue administration and treated, as a matter of priority, the need to carry out lifestyle audits for staff across the region as a strategy of reinforcing the same.
To curb illicit trade across the region, similar Customs valuation approaches for similar commodities will be adopted; and Heads of Commissioners of Domestic Taxes and ICT will work closely with the Africa Tax Administration Forum (ATAF) to fast-track integration of the Domestic Taxes systems across the region.
Overall, KRA looks forward to an exciting half year in its quest to promote regional integration in tax matters and will be keen on pushing the implementation of the directives and report its achievements in the 48th EARACG meeting in July in Nairobi, Kenya.