East Africa countries to harmonise VAT regime

Kenya, Uganda, Rwanda and Tanzania have confirmed plans to harmonise their Value Added Tax regimes by April 2015.

Currently all countries have an 18% VAT rates with the exception of Kenya which has 16%. The countries will also look at standarising their customs regimes with the longer term aim of dropping intra-country tariffs. The four countries are keen on emulating the success of the European Union’s VAT regime.

However, there are still substantial differences to be overcome aside from VAT Kenya’s VAT rate. For example, Tanzania is alone in not charging VAT on tourism.