This is a review of the Tax Alert by PWC that provides an analysis of tax measures proposed through the East African Community Gazette Notice No. 18 of 2024. It includes information on changes in the East African Community Customs Management Act and the East African Community Common External Tariff.

The document also contains a summary of the 2024/25 National Budget Statements for Uganda, Rwanda, and Tanzania, detailing economic performance, growth projections, government priorities, and tax changes for each country. Additionally, it outlines key sectors contributing to economic growth, inflation rates, government spending priorities, and specific tax adjustments in income tax, value-added tax (VAT), excise duty, and other levies for the mentioned countries.

Here are the important points from the document that I believe are crucial for our understanding:

Changes in EAC CET Rates:

Stays of application of EAC CET duty rates specific to Kenya have been approved until 30 June 2025 for various sectors like metal, textiles, shoes, diapers, and furniture manufacturers.
Notable adjustments include lower duty rates on certain items like rice, cooking oil, and soya bean, while higher duty rates apply to products like textiles, mobile phones, and certain food items.
New items granted a decrease in duty rates effective from 1 July 2024 include particle board, gypsum filler, soap products, bed linen, and more.

Amendments to EAC CET:

Increases in duty rates have been approved for specific categories like preparations for beverages and food, seats, medical furniture, and other furniture materials.
The structure of the EAC CET has been modified to collapse certain tariff lines and split others, such as for vehicles and magnetic/optical media.

Duty Remission Approvals for Kenya:

Remission of duty has been granted on raw materials and industrial inputs for various sectors like mobile phone assembly, garment manufacturing, leather and footwear production, and more.
Specific duty rates under remission range from 0% to 10% for different categories of inputs.

Gazette Changes Affecting Other EAC Partner States:

Uganda, Rwanda, Burundi, and Tanzania will benefit from duty remission on raw materials for furniture and garments.
Rwanda will enjoy a stay of EAC CET rates at 0% for telecommunication equipment, and a duty rate of 0% will apply to imports for special projects in Uganda, Burundi, and Rwanda.

Preferential Tariff Treatment under COMESA and SADC:

The Republics of Burundi, Rwanda, Uganda, and Kenya have been granted a stay of application of the EAC CET on originating goods imported from COMESA, while Tanzania has the same for goods from SADC until 30 June 2025.

Amendment of the Fifth Schedule of the Act:

The threshold for duty exemption on new items brought into the EAC by travelers as accompanied baggage has been increased from USD 500 to USD 2,000.
A grammatical error in the exemption clause for seeds, spores, and cut plants has been corrected.

Download and read the full document here

Tax Alert Taxation in the East African Community