EAC ministers suspend new levies on high-risk products pending review
East African Community finance ministers have suspended the implementation of new levies on lubricating oils, aluminium bars and active yeast, which are considered high-risk products, and referred the taxation proposal to the regional sectoral committee on customs for further analysis.
The committee on customs is expected to report back to the finance ministers during the next pre-budget consultations meeting in May next year, according to the resolutions of the meeting by the EAC Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) held in Arusha, Tanzania, from 26-30 May.
Read: EAC adopts new levies on 'high risk' products to curb unscrupulous tradersThe new rates had been planned to take effect from July 1 this year.'It was agreed that the matter be referred to the Sectoral Committee on Customs for further technical analysis and that the proposed specific duties be deferred pending the outcome of this review,' the report of the meeting states.
During its 45th meeting held in November last year, SCTIFI adopted $0.46 per litre as a specific duty rate on lubricating oils so that the rate will be 25 percent or the $0.46, whichever is higher, and $700 per tonne as a specific duty rate on active yeast so that the rate will be 25 percent or the $700, whichever is higher. It also adopted $690 per tonne as a specific duty rate on aluminium bars, rods and profiles so that the rate will be 25 percent or the $ 690, whichever is higher.
These duties followed a directive by the ministers of finance during the pre-budget consultations in May 2023 that required member states and the EAC Secretariat to identify high-risk products and assign a specific duty rate to address issues related to under-invoicing and undervaluation.
The suspension of the proposed rates is expected to allow Tanzania more time to complete consultations with the relevant stakeholders on the proposed rates.
It is also expected to allow the sectoral committee on customs to relook at additional factors such as whether the products are imported from the same country or countries of export and whether the imports occur at or about the same period.
Read: Slow progress on harmonising standards affecting EAC tradeDuring the pre-budget consultations last month, Tanzania said that national consultations with relevant stakeholders had been concluded and highlighted the need to address a few outstanding issues before adoption of the proposed specific duty rates.
The meeting agreed that a re-analysis should be undertaken to determine the identical nature of the products based on a number of parameters, such as the percentage of aluminium content relative to other metals in the alloy, the proportion of base oil relative to other additives or constituents (lubricating oils) and the material composition of the product (Active yeast).
The finance ministers also noted that additional factors such as whether the products are imported from the same country of export and whether the imports occur at or about the same period should be considered.
Customs valuation is a major feature and concern of modern customs tariff systems since it is important for assessment of customs duties for purposes of generating revenues or as a means of encouraging and protecting domestic industries. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).
James Anyanzwa
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