E African revenue authorities vow to address tax challenges

East African revenue authorities have expressed commitment to addressing challenges facing tax administrations in the region, as well as promoting regional integration.

Revenue bosses from Kenya, Rwanda, Tanzania, Uganda, Burundi and South Sudan made the commitments in a communique on Wednesday, after the 48th biannual Assembly of East African Revenue Authority Commissioners General virtual meeting hosted by Githii Mburu, the commissioner general of the Kenya Revenue Authority.

The commissioner generals reported declining revenue performance from March to September due to the coronavirus pandemic, with the greatest decline having been registered in May.

In the quarter from July to September, revenue growth in the region ranged from 44.9 percent to 2.1 percent. This was unprecedented, bearing in mind that the revenues have on average been growing at double digits.

To address tax administration challenges, the revenue bosses agreed to continue using the alternative dispute resolution mechanism to unlock revenue.

They also committed to using technology and data analytics to enhance revenue collection, compliance and identification of potential revenue, as well as enhancing support to taxpayers.

The Kenya Revenue Authority is already using technology to better facilitate tax collection with online platforms, such as i-Tax, customer relationship management, the cargo scanner management solution, excisable goods management system and integrated customs management systems already in use.

Rwanda, on the other hand, also is using online platforms, such as electronic filing, m-payment, mobile declaration, Mobicash and electronic billing machines.

The commissioner generals committed to developing a joint strategy for the East African Revenue Authorities, to address taxation of the digital economy by addressing issues to do with the legal framework in terms of definitions, identification of players and the legal mechanisms.

Other administrative issues to be addressed include leveraging on technology and building technical skills.

The authorities also agreed to fast track the integration of domestic taxes systems in the region. Towards that end, a team consisting of commissioners of domestic taxes and directors of ICT were instructed to hasten the work.

The team was directed to work closely and leverage on the expertise and work done by African Tax Administration Forum on the same.

The East African Community secretariat is expected to come up with an agreed framework on how to address base erosion and profit shifting, as well as illicit financial flows within the region.

This will be addressed through legislation covering the various business models and administrative measures.

The commissioner generals also agreed to support the East African Community secretariat on the putting into operation and the sustainability of the regional electronic cargo tracking system in terms of funding options, institutional framework and interconnectivity.

They said the commissioners of customs should establish the information gaps and share with the East African Community centralized platform and deliberate on how to effectively share information among revenue authorities within the region.

To improve the integrity of staff in the revenue authorities, the commissioners general directed conducting lifestyle audits across the region.