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DOMESTIC REVENUE MOBILISATION AND TAX INCENTIVES AND THE IN EAST AFRICAN COMMUNITY
13 August 21 @ 8:00 am - 5:00 pm UTC+0
Enhancing Domestic Revenue through Curbing Harmful Tax Incentives in the East African Community
All the six EAC partners states (Burundi, Kenya, Tanzania, Rwanda, South Sudan, and Uganda) are providing various preferential tax treatments i.e. tax exemptions, tax holidays, credits, investment allowances, preferential tax rates and import tariffs (or customs duties), and deferral of tax liability. A 2016 report by TJNA and ActionAid International revealed that collectively, four East African countries (Kenya, Uganda, Tanzania and Rwanda) could still be losing around 1.5 billion USD to 2 billion USD a year to tax incentives.
Although policy intentions for granting tax incentives may be well-intentioned, often, their effectiveness is questionable. Tax incentives can be redundant – fail to yield the anticipated benefits, fuel the race to the bottom, facilitate illicit financial flows, promote corruption and distort market forces. As a result, governments’ collective domestic resource mobilisation (DRM) capabilities can be easily harmed.
The COVID-19 pandemic has elevated the significance of DRM by additionally stretching the fiscal capabilities of the global south, especially in Africa, to respond to the health crisis that has spilled into a socio-economic challenge.
It is against this background that the dialogue is being organised to chat ways of closing the loopholes that allow for siphoning out government revenue due to governance of tax incentives. Specific objectives of this multi-stakeholder online are to;
- Understand the landscape and impact of Tax incentives on DRM in the East African region.
- Discuss the implication of ongoing global tax reform discussion on the governance of tax incentives.
- Build a consensus between Civil Society Organisations (CSOs), Private Sector, International Financial Institutions, and EAC governments on strategies for accelerating tax incentives governance reforms.
- Agree on recommendations and strategies that governments can adopt in the EAC for improved governance of tax incentives and exemptions in the EAC.
- To foster sustainable multi-stakeholder engagement in the governance of tax incentives.
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