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Employees working in the East African Community will be shielded from double taxation since member states are working on a common law in regard to income tax payment.
The law is a relief since many questions have remained unanswered in regard to a favourable tax system for employees rotating in the East African job market.
Member states including: Uganda, Kenya, Rwanda, Burundi and Tanzania have come up with a project aimed at writing a draft report to work on a harmonised income tax law which will aim at wiping out double taxation which is provided in the current income tax law.
The project funded by German Technical Corporation (GTZ) will at least take two months to be accomplished.
Double taxation occurs if two countries burden a tax payer with a similar type of tax.
The Ugandan law firm: Birungi, Barat and Co. Advocates tasked with coming up with a harmonised tax system says the current law allows double taxation whereby employees’ incomes are taxed by the host countries as well as their countries of origin.
The law firm says “The only common law that covers transaction of goods and services within the EAC member states is the Customs Management Act but the rest of the tax laws such as Value Added Tax and Income Tax differ from one country to another.”
According to the draft summary the project is an initiative of the EAC partner states, which by July 1 will effect the operations of the Common Market. The law will be drafted by tax consultants based on international conformity standards and best practices guided by the decision of the community’s Council of Ministers.
Existing tax anomalies
The consultants will take stock of existing tax anomalies (double taxation) and develop an EAC code of conduct in order to avoid harmful tax competition. The draft report also states that the tax consultants will work in collaboration with partner states revenue administration contact persons in tax policy departments to obtain information on the countries’ tax laws.
Once the work is concluded, it will be presented to the EAC Council of Ministers for approval before partner states for approval.
Employees working in the East African Community will be shielded from double taxation since member states are working on a common law in regard to income tax payment.
The law is a relief since many questions have remained unanswered in regard to a favourable tax system for employees rotating in the East African job market.
Member states including: Uganda, Kenya, Rwanda, Burundi and Tanzania have come up with a project aimed at writing a draft report to work on a harmonised income tax law which will aim at wiping out double taxation which is provided in the current income tax law.
The project funded by German Technical Corporation (GTZ) will at least take two months to be accomplished.
Double taxation occurs if two countries burden a tax payer with a similar type of tax.
The Ugandan law firm: Birungi, Barat and Co. Advocates tasked with coming up with a harmonised tax system says the current law allows double taxation whereby employees’ incomes are taxed by the host countries as well as their countries of origin.
The law firm says “The only common law that covers transaction of goods and services within the EAC member states is the Customs Management Act but the rest of the tax laws such as Value Added Tax and Income Tax differ from one country to another.”
According to the draft summary the project is an initiative of the EAC partner states, which by July 1 will effect the operations of the Common Market. The law will be drafted by tax consultants based on international conformity standards and best practices guided by the decision of the community’s Council of Ministers.
Existing tax anomalies
The consultants will take stock of existing tax anomalies (double taxation) and develop an EAC code of conduct in order to avoid harmful tax competition. The draft report also states that the tax consultants will work in collaboration with partner states revenue administration contact persons in tax policy departments to obtain information on the countries’ tax laws.
Once the work is concluded, it will be presented to the EAC Council of Ministers for approval before partner states for approval.
