COMESA agrees on tax plan
May 23, 2007
AFRICA's biggest trade bloc COMESA approved a common external tariff system yesterday, clearing a major hurdle for a customs union intended to boost trade in some of the world’s poorest nations.
By Paul Busharizi
and Agencies
AFRICA's biggest trade bloc COMESA approved a common external tariff system yesterday, clearing a major hurdle for a customs union intended to boost trade in some of the world’s poorest nations.
The Common Market for Eastern and Southern Africa (COMESA), which represents 20 countries, also urged member states who have yet to join its free trade area to sign up before the planned launch of the customs union in 2008.
“We must harden our resolve to desist from engaging in practices aimed at protecting our individual markets,†said Kenya’s President Mwai Kibaki, the COMESA chairman.
“Although such interventions may yield short-term relief to our individual economies, they can cause serious distortions in the larger COMESA market and erode investor confidence,†he said in a speech ending a two-day summit.
Uganda is one of seven countries yet to join the free trade area, along with Angola, Democratic Republic of Congo, Ethiopia, Eritrea, Seychelles and Swaziland.
They are yet to make a decision, citing loss of revenues and competition from more advanced economies.
But officials in the trade ministry said an announcement that Uganda is joining the free trade area is imminent.
“We needed to carry out some studies, those have been done and passed to the policy makers … The studies showed that contrary to previous fears the benefits of joining far outweigh the negatives,†a senior trade official said.
“It’s been long overdue and has been a concern for everybody especially the private sector.â€
Under the agreement to harmonise the tax regimes, COMESA countries will pay zero tax for capital goods and raw materials, 10% for intermediate products and 25% for finished goods.
Kibaki said the bloc, which stretches from Egypt to Zimbabwe, was yet to finalise details of a transitional period for COMESA countries to make tariff adjustments.
Kenya and other COMESA members; Burundi, Comoros, Djibouti, Egypt, libya, Madagascar, malawi, Mauritius, Rwanda, Sudan, Zambia and Zimbabwe have joined the free trade area.
Sixteen COMESA members are in talks with the European Union to replace a preferential market access deal that contravenes World Trade Organisation rules.
On the political front, the meeting endorsed the results of elections in the Democratic Republic of the Congo and Madagascar, and urged a political settlement to the conflict in Sudan’s volatile Darfur region. The next summit will be held in Harare, Zimbabwe in 2008.
President Yoweri musevni and foreign affairs minister Sam kutesa attended the conference.
and Agencies
AFRICA's biggest trade bloc COMESA approved a common external tariff system yesterday, clearing a major hurdle for a customs union intended to boost trade in some of the world’s poorest nations.
The Common Market for Eastern and Southern Africa (COMESA), which represents 20 countries, also urged member states who have yet to join its free trade area to sign up before the planned launch of the customs union in 2008.
“We must harden our resolve to desist from engaging in practices aimed at protecting our individual markets,†said Kenya’s President Mwai Kibaki, the COMESA chairman.
“Although such interventions may yield short-term relief to our individual economies, they can cause serious distortions in the larger COMESA market and erode investor confidence,†he said in a speech ending a two-day summit.
Uganda is one of seven countries yet to join the free trade area, along with Angola, Democratic Republic of Congo, Ethiopia, Eritrea, Seychelles and Swaziland.
They are yet to make a decision, citing loss of revenues and competition from more advanced economies.
But officials in the trade ministry said an announcement that Uganda is joining the free trade area is imminent.
“We needed to carry out some studies, those have been done and passed to the policy makers … The studies showed that contrary to previous fears the benefits of joining far outweigh the negatives,†a senior trade official said.
“It’s been long overdue and has been a concern for everybody especially the private sector.â€
Under the agreement to harmonise the tax regimes, COMESA countries will pay zero tax for capital goods and raw materials, 10% for intermediate products and 25% for finished goods.
Kibaki said the bloc, which stretches from Egypt to Zimbabwe, was yet to finalise details of a transitional period for COMESA countries to make tariff adjustments.
Kenya and other COMESA members; Burundi, Comoros, Djibouti, Egypt, libya, Madagascar, malawi, Mauritius, Rwanda, Sudan, Zambia and Zimbabwe have joined the free trade area.
Sixteen COMESA members are in talks with the European Union to replace a preferential market access deal that contravenes World Trade Organisation rules.
On the political front, the meeting endorsed the results of elections in the Democratic Republic of the Congo and Madagascar, and urged a political settlement to the conflict in Sudan’s volatile Darfur region. The next summit will be held in Harare, Zimbabwe in 2008.
President Yoweri musevni and foreign affairs minister Sam kutesa attended the conference.