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Coronavirus: It’s time EAC scraps collection of tax at border points

Saturday April 18 2020
By Charles Onyango-Obbo

I think it was eight years before Rwanda (together with Burundi) joined the East African Community in 2009, I was still editor at The Monitor, in Kampala, and we sat down with President Paul Kagame in Kigali for an interview.

I asked about the troubles in eastern Democratic Republic of Congo, where Rwanda and Uganda were still embroiled in the murky conflict; corruption; post-genocide reconstruction, and other grim things that afflict daily political life in Africa.

We then went on to sunnier and more hopeful subjects, including whether Rwanda planned to join the EAC, and what gains it expected.

It was mostly the usual fare: wider markets, cheaper prices in the long-term, speedier transportation of goods in and out for landlocked countries, and so forth.

He then paused and reflected for a few seconds and said; “Actually all these protocols and other things are not necessary, there is just one thing we need to do and we will have a perfect common in East Africa – get rid of customs taxes.”

In the midst of the coronavirus pandemic, and the snarl of cargo trucks that happened at East Africa’s borders, one of the lessons that should be taken away is that EAC needs to scrap these tariffs on goods transported across border lines, because they are a menace in times of crisis. There are alternatives.

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It won’t be easy. Customs are easy pickings, and the dream of lazy tax collectors. Tax officials many times don’t even have to get off their chairs to collect. And for most countries in the EAC, they account for well over 20 per cent of their fiscal revenues.

They also function as a sovereignty vehicle. By taxing trade goods, like pets, countries kind of pee on their border lines, marking out the parts that are under their control.

Covid-19 though, has shown as they are archaic, and by requiring truckers and officials to gather in large numbers in close proximity, not fit for a today and future that is likely to be virus-plagued.

The second lesson is the open skies policies, which the East African Community has talked to death and done nothing about, is now.

Post-Covid-19 actions need to involve investments in regional airports so they can land regular passenger flights from many destinations in the region.

Someone who is tracking price differentials in during the pandemic, told me Kenyans are paying over twice for eggs than in Uganda, the regular routes haven’t been hamstrung by the virus.

It is also a way to transport goods with fewer people (a crew of two will suffice), in a short period, without passing through hundreds of towns collecting or leaving infections, and landing it safely in the far corner of a country that needs it. Retooled Kenyan textiles factories producing face masks, suddenly needed more cotton.

With an open skies region, a flight could have taken off Eldoret, landed in Soroti in northeast Uganda, returned with cotton, and distributed it before curfew.

And, thirdly, a favourite I never get tired of banging on about. Egos and unhealed wounds from bygone years will not allow for a joint East African airline, but a regional drone transport service, could hack it.

Charles Onyango-Obbo is a journalist, writer, and curator of the “Wall of Great Africans”. Twitter@cobbo3

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