NAIROBI, March 23 (Xinhua) -- East Africa's umbrella body of the private sector on Friday called for the review of the East African Community (EAC) Common External Tariff (CET).
Lilian Awinja, the Executive Director of the East Africa Business Council (EABC), told a regional forum in Nairobi that the CET is structured under three bands of 25 percent for finished goods, ten percent for intermediate goods and zero percent for raw materials and capital goods.
"For the last 12 years of implementation of the EAC CET, it has been evident that the tariff lines need a comprehensive review with a view to align the existing tariff structure and rates with dynamic global trade changes and regional trade environment," Awinja said during the EABC 20th anniversary High Level Conference.
EAC members include Kenya, Uganda, Tanzania, Rwanda, Burundi and South Sudan.
Awinja urged partner states to consider replacing the existing three-band tariff structure with a four band tariff structure in order to encourage backward and forward value addition in the manufacturing sector.
Awinja said that the common external tariff is a very important annex of the EAC Customs Union Protocol as it reflects the tariff structure between the EAC partner states and the rest of the world.
She added that the external tariffs were reviewed in 2010 and the three band structure was maintained.
"However, each year the partner states through the pre-budget consultations of the EAC ministers of finance have been undertaking annual reviews on specific products," she noted.
Awinja noted that these annual reviews have been manifested with either an increase or decrease of duty rates of specific products based on their availability in the region.
"The main challenges regarding these reviews have been on how to strike a delicate balance between the several conflicting interests ranging from revenue considerations to support of infant industries," Awinja said.
