The East African Business Council (EABC) is calling for partner states to adopt a 35 percent tariff on imported goods outside the East African Community in what it says will help promote and develop regionally manufactured products.
“The way to protect our infant industry is to raise the common external tariff for those products to 35 rate, it means we will be promoting industrialization, we will be enhancing our intra-regional and extra regional trade and our trade with the rest of the world, “said John Bosco Kalisa the Chief Executive Officer of the regional business council.
The Common External tariff means that the tariffs of imported goods that includes textiles, motor vehicles, iron and steel will be increased to 35 percent. However some East African Legislative Assembly (EALA) members slammed the move arguing it is not beneficial for consumers.
“Now that one has been established shouldn’t excite you where there are no industries. And it is going to establish price equilibrium at a level where East Africans cannot be able purchase commodities,” said EALA member Fred Mukasa Mbidde.
Regional law makers said that some of the goods which 35 percent have been imposed on including vehicles are yet to be manufactured by the member states of the East African Community.
Under the current East African Community common external tariff structure, the maximum tariff is 25% while the other bands are 0% on imported raw materials and 10% on bi products with few sensitive products attracting higher tariffs ranging from 30% to 100%.
“When do you make such decisions at a time when we have got even backwardation price volatilities in terms of oil and even other products due to of course the cantankerous between Ukraine and Russia,” said Mr. Mbidde.
The East African Community analysis shows if Partner States adopt 30% or 33% or 35% as the maximum common extern tariff rate, the total tax revenues will increase by 3.9 %, 4.9% and 5.5% respectively.
Member states of East Africa were given one month to take a final position on the new tariff, if adopted the measure will come into force in the next financial year slated for June this year.