The East African economies are working on harmonising levies paid by investors trading in bonds and shares as preparations for a joint securities exchange gathers momentum.

The move will also see listing fees, commissions and other charges in the capital markets synchronised across the region.

But no common position has been reached by the regional finance ministers on the harmonisation of domestic taxes undermining the free movement of goods and services across the region.

It is argued that differences in income, capital gains, excise and value added tax rates have made it difficult for companies doing business across the region to operate efficiently.

Discussions are under way under the auspices of the East African Securities Regulatory Authorities (EASRA) to administer similar stockmarket charges across the region in an effort to make regional capital markets attractive to both local and foreign investors.

Kenya’s Capital Markets Authority acting chief executive Paul Muthaura said negotiations over modalities of implementation are ongoing.

“That is a continuous discussion that we are having. Harmonisation of these charges is part of a long term initiative by EASRA to establish a single capital market for the region,” Mr Muthaura said.

Currently, the cost of trading in shares and bonds differs across the EAC member countries.

Harmonisation of capital markets charges is part of the integration agenda of the EAC financial sector.

READ: East African bourses ease listing terms

An issuer of securities to the public is charged 0.15 per cent of the value of the issue by the Capital Markets Authority (CMA) of Kenya while approval of listing by introduction is 0.25 per cent of the value of the issue subject to minimum fee of Ksh50,000 ($485.01) and maximum of Ksh5 million ($48,501.3). Approval fee for rights issue is 0.25 per cent of the value of the issue.

Data shows Kenya and Uganda are more expensive for stock  investors with  each country  charging 2.1 per cent  fee on the value of the transaction compared with Tanzania (2 per cent) and Rwanda (1.71 per cent).

Kenya is, however, the cheapest for bond trading, charging 0.034 per cent as commission  on bond transaction compared with Uganda (0.05 per cent), Tanzania (0.0625  per cent) and Rwanda (0.81 per cent).