Regional tax authorities need joint intelligence unit to sort out smuggling
Revenue authorities from the East African Community (EAC) member states are mulling for the formation of a single intelligence unit to sort out smuggling which contribute to income losses.
During the 52nd East African Revenue Authorities Commissioners General (EARACGs) assembly in Nairobi, the commissioners famous that institution of a joint Intelligence and Surveillance Fusion Centre will assist sort out smuggling which stays a problem to income mobilization and societal security.
“While regional economies grew by 5.8pc in real terms or 14.5pc in nominal terms in FY 2023/224, tax revenue increased only13.3pc indicating that tax collection was not keeping pace with the economic growth,” stated EARACG.
According East Africa Revenue Authorities between October 2023 and April 2024 a complete of Ksh 392 million ($3.04m) was realised in income from tax evasion investigations.
EARACG referred to as for coverage measures together with tax harmonisation to be expedited and administrative methods equivalent to uniform valuation, enforcement methods and knowledge sharing on exports be enhanced as stipulated by regulation.
A the Tax Transparency in Africa 2022 report by the Global Forum, African international locations lose an estimated $50-$80 billion from illicit monetary inflows principally by way of porous borders.
“It was noted that revenue performance in the region continued to be negatively impacted by smuggling, increase in tax exemptions, expansion of the informal sector, cash economy and inadequate visibility of taxpayer transactions from both Customs and domestic revenue fronts,” the commissioners added in its last communiqué.
The commissioners equally agreed to advocate for rationalisation of tax expenditures for widespread benchmarking to handle substantial income foregone by way of tax exemptions, discover and undertake Artificial Intelligence (AI) in income administration, proceed to implement the digital service tax and think about the adaption of the numerous financial presence taxation framework based mostly on every nation’s progress in taxation of the digital financial system and operationalize the EAC Multilateral Double Taxation Agreement (DTA) by fast-tracking its ratification earlier than submission to EAC for approval.
Additionally, the commissioners agreed to hurry up improvement of a typical home tax system utilizing inside experience and the prices concerned.
The 52nd assembly was attended by income commissioner generals from Kenya, Tanzania, Uganda, Rwanda, Burundi, DRC, South Sudan, Somalia, Zanzibar and Malawi.
