EAC Revenue Commissioners Roots For Digital Tax Service

The 50th East Africa Revenue Commissioners’ General Meeting sat at Lake Victoria Serena Hotel, in Uganda and resolved to adopt the use of digital tax service, as a remedy to combat cross-border smuggling of goods.

Uganda Revenue Authority (URA) Commissioner General, John Musinguzi highlighted three areas, which include taking measures to address cross-border smuggling, which remains a big problem among East Africa Community member states of; Uganda, Kenya, South Sudan, Tanzania, Rwanda Burundi, and the Democratic Republic of Congo (DRC).

Musinguzi said among the resolutions carried from the two days meeting was to harmonize tax administration and data systems in the region, with a special focus on technology in tax management for today and the future to improve efficiency and grow revenue.

“Among strategies, we agreed upon is to address combating smuggling by instituting electronic cargo registration and tracking systems, where cargo is registered at the point of entry and tracked up to the point of exit”, Musinguzi said while addressing Journalists.

Musinguzi added that it was important for the region’s member countries to grow revenues for development and become self-sustaining economically.

On his part, Kenya Revenue Authority (KRA) Commissioner General, Githi Mburu, explained that electronic smart gates at points of entry and exit would be installed in this effort.

“Electronic smart gates will register cargo vehicle numbers, and record cargo weight, which similar data should collaborate at the point of exit. Any discrepancy would lead to the grounding of the cargo vehicle(s) for further questioning the cargo handler,” he said, adding that; drones will also be introduced to monitor cargo movement.

In addition, Githi said Kenya has already introduced electronic smart gates and drones and is in the process of procuring many to do cargo surveillance. He said Kenya introduced the Digital Service Tax in the Finance Act 2020, and it became effective on January 1, 2021.

Ramathan Goobi, Uganda’s Ministry of Finance Permanent Secretary and Secretary to the Treasury said there is a need to develop innovative technology-driven approaches to sustainably facilitate taxpayer compliance in a user-friendly and accessible manner.

He urged tax administrators to embrace research and studies to inform and facilitate policy formulation, to address issues related to effective tax rates, simplicity of tax regimes, enhancing compliance, revenue growth, and appropriate tax structures.

Goobi added that there has been sustained revenue growth for the last ten years, where member states still fell far below the sub-Saharan average tax-to-Gross Domestic Product (GDP) ratio of 18 percent. He called on EAC tax administrators to promote tax policies, both domestically and in the region.

The next EAC Revenue Commissioners General Meeting, which is bi-annual, is slated to take place in Tanzania from 25th to 26th August 2023.