Digitization of imported goods tariffs within EAC commences in a bid to boost trade transparency
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Staff reporter GAROWE ONLINE
- Posted On 29-04-2023, 08:43AM
NAIROBI, Kenya - The East African Community (EAC) secretariat has embarked on digitizing its Common External Tariffs (CET), a move that is aimed to encourage the countries’ participation in regional and international trade.
This CET is meant to protect the member states of the customs union from outside competition by making imported goods more expensive, while at the same time promoting trade among the member countries by eliminating tariffs on their trade.
According to Peter Mathuki, EAC Secretary General attributed the increase in intra-regional trade to political goodwill among the members of the Summit of EAC Heads of State and the relaxation of Covid-19 restrictions in the region amongst other factors.
Mathuki said that high-level discussions among the Heads of State had eliminated many Non-Tariff Barriers (NTBs) hampering intra-regional trade and expressed hope that this and other factors would help raise the level of intra-regional trade in East Africa to at least 40% over the next five years.
“From 1st July 2022, imports of locally available goods into the region; such as meat, furniture, and textiles, have been attracting a tariff of 35 percent. The move aims at promoting local production, value addition, and industrialization,” said Mathuki, adding that the CET is one of the key instruments under the Customs Union pillar, which justifies regional integration through uniform treatment of goods imported from third parties.
The program, being implemented with the support of the World Customs Organisation (WCO), is aimed at bolstering the region’s private sector by encouraging participation in both regional and international trade.
Intra-regional trade within the East African Community (EAC) is on an upward trajectory, standing at $10.17 billion as of September 2022 while total trade with the rest of the world stood at $62 billion, highlighting a need for further improvement. This represents a 20 percent share of Intra-trade to global trade.
A common external tariff (CET) is a tariff, or tax, applied to imported goods by a group of countries that have formed a customs union. The intra-EAC trade, accounting for imports and exports in the seven EAC partner states, grew to 15 percent in 2021 representing $9.5 billion in value from 13 percent or $7.1 billion value reported in 2019.
The digitization of the CETs will see the region’s business community — exporters and importers- gain access to trade information from the private sector in international trade.
The platform, which is currently under development in partnership with Global Trade Solution (GTS), will enable seamless migration of the EAC CET during the transposition of the Harmonised System (HS).
It will provide information on the administration and management of the Duty Remission Scheme, the production of information, and the publication of other measures affecting the implementation of CET.
The platform will also include management of preferential tariff treatment on originating goods imported from Regional Economic Communities (RECs) where EAC partner states are members.
In addition, it will provide pictorial illustrations of products per tariff line as well as a link to the WCO Harmonized System.
According to a statement from the EAC secretariat, the platform will be launched and made available for public use by June 30.
Accessed electronically from both computers and mobile devices, the platform will contain searchable functionalities by tariff code or generic product description with data extraction for statistical purposes as may be required by users.
The EAC currently implements a four-band CET with a minimum rate of zero percent for raw materials and capital goods and 10 percent for intermediate goods not available in the region.
Additionally, there is 25 percent for intermediate goods available in the region and 35 percent for imported finished products available in the region.
However, there are other products classified as “sensitive products” which attract a rate above 35 percent listed in Schedule 2 of the CET.
GAROWE ONLINE
