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Trouble Brews Between EAC Members

Kenya, Uganda, Rwanda and Tanzania may be denying smaller EAC economies a chance at regional trade by levying irregular excise duty. A study on discriminative taxes in the EAC shows that Burundi and South Sudan, whose economies are smaller than the other 4 EAC members, have been unable to make good sales in the region due to the irregular excise. In East Africa, excise duty is imposed on goods manufactured in a partner state by a licensed manufacturer; services supplied in the partner state by a licensed person; or goods imported into the partner states. Excisable commodities include bottled water, soft drinks, cigarettes, alcohol, fuels and motor vehicles. That said, Uganda wants stern laws enacted against barriers inhibiting trade in the EAC. One major criticism of the Regional Economic Communities (RECs) is that member states very seldom use the arbitration systems that exist to complain against each other. It will be interesting to see if this case will be different.

Alastair Tempest

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