Kila siku watu wanaimba humu jinsi wataipita Kenya, jinsi Kenya haipo mbali, jinsi Kenya ni kainchi kadogo na watakafikia tu.
Bajeti hii hapa
Kenya - $22.62b
Tanzania - $13.51b
Uganda - $7.9b
Rwanda - $2.6
- East African governments want to implement taxation measures that will see them make good their promise to promote local manufacturing and reduce importation of goods, particularly second-hand clothes and shoes.
- Steel rolling mills, textiles, animal feeds and leather benefit from increased duties meant to promote local industries.
- Overall, the four countries increased their annual budgets for the 2016/2017 fiscal year, with the focus on increased taxes, even as the integration policies took backstage.
- Regional finance ministers have proposed taxation measures that seek to rope in the informal sector, which contributes about 55 per cent of sub-Saharan Africa’s gross domestic product.
East African governments want to implement taxation measures that will see them make good their promise to promote local manufacturing and reduce importation of goods, particularly second-hand clothes and shoes.
Rwanda increased taxes on used clothes from $0.2 to $2.5 per kilogramme, and on used shoes from $0.2 to $3 per kilogramme, while Tanzania increased taxes on the second-hand clothes from $0.2 to $0.4 per kilogramme, coming into the same band with Kenya, which effected a similar increase in the previous financial year.
“Taxes on used clothes and shoes will increase as a way of supporting locally made products and industries. East African heads of state agreed to promote industries that can produce textile. Now someone has to take the bull by its horns. Let used clothes go to other regions, because we want our industries to grow,” said Claver Gatete, Rwanda’s Finance Minister.
READ:
EAC heads of state to ban used clothes and shoes imports
Rwanda is also targeting the cement, sugar, rice and clothing sectors, where it believes local production can reduce imports, as it enhances ongoing export promotion efforts by the export promotion fund. Meanwhile, Kenya is exempting garments and leather footwear produced in the export processing zones from VAT.
Clive Akora, the associate director, tax and regulatory services at audit firm KPMG said the move would protect the EPZs, which face competition from imports.
“Kenyans will now have access to locally made high-quality clothes and footwear previously exclusively made for the export market. However, EPZ enterprises have a quota for exports into Kenya and it will be interesting to see how the exemption will be implemented in view of this quota,” said Mr Akora.
Common external tariffs
Tanzania’s Finance Minister Philip Mpango said the government would also introduce a 10 per cent Customs duty on flat rolled products of iron and increase the Customs duty on iron rods and bars and steel from 10 per cent to 25 per cent to ensure that the locally produced products can compete with imports.
This is in line with the region’s finance ministers’ agreement to amend the common external tariffs (CETs) in the region’s Common Market Act.
The amendments to the CETs range from iron products, cement, automotive bolts and nuts, fishing nets and oil and petrol filters. These amendments have not been mentioned in the Kenyan budget statement. However, it is likely that the proposed amendments to the CET will be implemented.
“All these measures were agreed to by the finance ministers from all EAC member states to protect local industries,” said Dr Mpango.
Tax amnesty
The region has also reduced the cost of doing business in a bid to attract more investors with Rwanda proposing to scrap corporate income tax for international companies with headquarters in Rwanda and with an investment of $10 million. Furthermore, any person investing more than $50 million in Rwanda will enjoy a seven-year tax holiday.
Kenya is also proposing a tax amnesty for 2016 and prior years for all principal taxes, penalties and interest for those who repatriate assets and income to the country, provided the taxpayers submit their return and accounts for the year of income 2016.
Push for local manufacturing to hurt East Africa integration