EAC tax laws to be harmonised

LUSEKELO PHILEMON

Effective information exchange among revenue authorities in the region is the new focus of the East African Community (EAC).

EAC Director for Planning, Tharcisse Kadede said the push for improved communication is meant to ensure that, among other things, tax laws are applied correctly, while maintaining sovereignty over the application and enforcement of these laws.

EAC is currently running a technical workshop on the exchange of information for tax purposes among revenue authorities in the region. The on-going two-day workshop, expected to generate recommendations and a roadmap to outline further action commenced yesterday in Arusha.

Among other aims is the creation of a realistic timeframe to master the required resources and the assigning of responsibilities to oversee the implementation of a common strategy and the procedure to follow to improve exchange of information.

“It will focus on effective implementation mechanisms that will in turn support information exchange…” explained Kadede. He said other functions to be served by the system will be in translating already signed agreements, while also clarifying implementation of various policy decisions in order to develop a robust and effective system of administrative cooperation.

According to the official, the workshop comes against the background of an EAC ‘Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes and Income’(DTA), signed on November 30, 2010. The Agreement provided the necessary legal basis to enhance cooperation among the five revenue authorities.

A ‘Memorandum of Understanding on the Exchange of Information on Tax Expertise and Other Related Matters was signed on November 10, 2010 by the Partner Revenue Authorities and spells out the rules and procedures for the successful adoption of information exchange in tax matters.

The workshop has drawn practitioners from the EAC Partner States, EAC representatives engaged in the regional harmonisation of tax procedures and experts from international, regional and bilateral organisations and development agencies all converged to share knowledge, experiences and good practices necessary in the practice.

The inherent goal of the Common Market Protocol is to enable taxpayers to operate with no or limited restriction by national borders but it is also vital to ensuring that citizens pay their taxes correctly, timely and in the right place.

Exchange of information among revenue authorities across borders is therefore of paramount importance in fighting tax avoidance and tax evasion, which threaten government revenues and reduce the resources available for public services.

SOURCE: THE GUARDIAN (23/08/2012): http://www.ippmedia.com/frontend/index.php?l=45089