CUSTOMS UNION SIGNED

The Dar es Salaam Financial Times reported on March 2 that the three East African Heads of State had finally signed in Arusha the 40-page protocol establishing the ‘East African Community Customs Union’ amidst a series of unresolved issues. The signing had taken four years of negotiations and finally had to be considerably watered down to accommodate deep-seated differences between the member states. One of the critical issues is what tax to charge on goods from outside the EAC, known as the ‘Common External Tariff’ (CET). Uganda has unilaterally decided to apply a 20% rate for finished goods, while Kenya and Tanzania have stuck to the more protectionist 25%. Uganda and Tanzania have been allowed to place a surcharge on specified lists of products from Kenya due to the latter’s generally more advanced industrial base.

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