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EAST AFRICAN COMMON MARKET

East Africa needs to have genuine common market

In Summary

• Kenyan chicken farmers are upset that Uganda has imposed VAT, withholding tax and railway levy on their exports

• In December Kenya slapped VAT onto imports of Ugandan milk that was undercutting Kenyan dairy farmers on price

Trucks parked on the Malaba-Bungoma highway as drivers protest harassment in Uganda.
Trucks parked on the Malaba-Bungoma highway as drivers protest harassment in Uganda.
Image: EMOJONG OSERE

Poultry farmers are bitter that the Uganda Revenue Authority is charging VAT, withholding tax and railway levy on chicken exports to Uganda. They want the government to intervene.

They argue that Ugandan poultry farmers have free access to the Kenya market. The poultry farmers are right. They should equally enjoy duty-free access to the Ugandan market as members of the common market created by the East African Community.

The only problem is that Kenya sometimes behaves just like Uganda. In December Kenya slapped VAT on imports of Ugandan milk that was undercutting Kenyan dairy farmers.

 

In a common market, sometimes your produce will be more competitive and sometimes less competitive. Kenyan chicken is cheaper than Ugandan chicken, Ugandan milk is cheaper than Kenyan. You cannot always win.

East African member states need to set the same rates of VAT across the community and, where possible, align other taxes like corporation tax and CGT so that we move closer to a fully integrated market. 

And similarly, member states should allow the free movement of all goods, as promised by the EAC, including Kenyan poultry and Ugandan milk.

Quote of the day: "I shall not waste my days in trying to prolong them."

Ian Fleming
The author of James Bond was born on May 28, 1908