The East African Community seeks to address fears said to be a hindrance to the rolling out of key regional protocols.

The EAC secretariat has formed a team of four experts from each state to conduct a new study to identify and make recommendations on the fears of each state that hinder the implementation of the protocols — Customs Union, Monetary Union and the Common Market Protocol — before the end of this year.

The key fears previously reported include a rigid tax regime, sharing of resources, trade facilitation, treatment of transit goods, free flow of goods, external trade relations and other trade related issues. These are some of the issues the taskforce will be seeking solutions to.

“Partner states are yet to formulate a common revenue-sharing mechanism for tariffs; an element critical to the free flow of goods intra-EAC as it allows for the taxing of goods at the port of entry,” said Richard Sindiga Kenyan EAC director, economic affairs.

The recommendations will be tabled to the EAC council of ministers that is then expected to submit them to the Heads of States summit due in November.

The EAC Common Market Protocol that marked its second anniversary on July 1, has not yet been fully implemented since there is no common legal framework in the region to ensure free circulation of goods with minimal or no border controls, harmonisation of standards for goods moved through the territory, an interconnected payment system and collection of customs duties at the first point of entry.

“We still have internal tariffs within the member states. Goods are not circulating freely,” said Mr Sindiga adding that the region cannot have a customs territory unless these barriers and fears within member states are fully addressed.

A customs authority with a stronger mandate to enforce compliance with the Customs law has was proposed in the treaty but has not been implemented.

The main rationale behind the adoption of the EAC Customs Union was to enhance economic gains through elimination of tariffs and non-tariff barriers within the member states. 

“Lack of an agreed mechanism for collection and sharing of customs revenue as well as harmonised domestic tax regimes have failed the EAC Customs Union,” said Mr Sindiga.

Previous studies have indicated that impediments to the free circulation of goods due to unnecessary border controls and continued application of rules of origin on internal trade are some of the hurdles impeding attainment of a single customs territory.

“Harmonised domestic tax collection on goods such as excise duty and Value-Added Tax (VAT) in the region is the key to a fully-fledged customs union,” he noted.

However, former East African Legislative Assembly member Abdi Abdirahin says that unless all the member states co-operate in harmonising their trade laws, it will still be a challenge for the region to implement a single customs territory.

“So far no member state has fully identified the laws that ought to be harmonised for implementing a single customs union,” said Mr Abdirahin. “Kenya has 10 laws that ought to be changed while Uganda has just started identifying laws that are to be harmonised.”

This, he said, shows how uncommitted all the partner states are towards the customs union.

He says the EAC can adopt a system like that of the European Union in which a customs authority exists but the national code orregulations are retained.

EAC Custom Union was expected to be implemented by January 2010 after a transitional period of five years but is far from being achieved.