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East African Revenue Authorities Agree to Develop Joint Strategy for the Taxation of the Digital Economy — Orbitax Tax News & Alerts

The 48th East Africa Revenue Authorities Commissioner Generals Meeting was held virtually on 11 November 2020, during which agreement was reached on developing a joint strategy for the taxation of the digital economy. According to the Communique published by the Kenya Revenue Authority following the meeting, the revenue authorities have agreed to "Develop 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."

In addition to the issues of taxing the digital economy, the revenue authorities have also agreed to the following:

  • Continued use of the Alternative Dispute Resolution mechanism to unlock revenue.
  • Use of technology and data analytics to enhance revenue collection, compliance and identification of potential revenue as well as enhancing support to taxpayers.
  • Respective Revenue Authorities to provide bilateral or East African Community level support to the South Sudan National Revenue Authority.
  • Continue engaging with the EAC Secretariat on the need to establish a Committee on Tax Affairs at the EAC where tax administration matters of DTD, ICT and other administrative issues not related to Customs can be deliberated.
  • Fast track the integration of domestic taxes systems in the region. A team consisting of Commissioners of Domestic Taxes and Directors of ICT to hasten the work on this. The team is directed to work closely and leverage on the expertise and work done by ATAF on the same.
  • Commissioners General directed that in order to improve the integrity of staff in the Revenue Authorities, lifestyle audits should be conducted across the region.
  • The East African Community Secretariat to come up with an agreed framework on how to address base erosion and profit shifting and illicit financial flows within the East African Community. This will be addressed through legislation covering the various business models and administrative measures.
  • Commissioners of Customs to establish the information gaps and share with the EAC centralised platform and deliberate on how to effectively share information among the Revenue Authorities within the East African Community.
  • Support the East African Community Secretariat on the operationalisation and sustainability of the Regional Electronic Cargo Tracking System in terms of funding options, institutional framework, and interconnectivity.

Authorities that took part in the meeting include the revenue authorities of Burundi, Kenya, Rwanda, South Sudan, Tanzania (including Zanzibar authorities), and Uganda.