Kampala, Uganda: The East African Business Council (EABC) has urged governments within the East African Community (EAC) to harmonise fiscal policies and streamline tax regimes as a strategy to drive regional trade, boost competitiveness, and raise incomes across the bloc.
The appeal was made on Thursday, April 10, 2025, during EABC’s presentation to Uganda’s Parliamentary Committee on Finance, Planning, and Economic Development as part of ongoing pre-budget consultations for the 2025/2026 financial year.
Speaking on behalf of the Council, EABC Vice Chairperson for the Uganda Chapter, Mr. Simon Kaheru—flanked by EABC Board Director Oscar Kamukama and Kenneth Ayebare from the Private Sector Foundation Uganda (PSFU)—emphasized the importance of aligning economic policies across partner states to strengthen regional integration and promote inclusive growth.
Kaheru praised the Ugandan government for its continued investment in infrastructure, noting that such development had significantly lowered the cost of doing business while spurring private sector expansion.
He said Uganda’s economy grew to UGX 202.7 trillion (USD 53.7 billion) in the 2023/24 financial year, marking a 6.1% increase from the previous period—an achievement the EABC considers a testament to the country’s reform agenda. Despite this progress, intra-regional trade among EAC states remains relatively low, accounting for only 15 percent of total trade—valued at USD 12.1 billion in 2023.
According to the EABC, there is substantial potential to grow this figure to at least 25 percent, or USD 80 billion, if the right policies are adopted across the region.
During its submission, the council highlighted several interventions that could unlock regional trade and industrial growth. Among these was the call for full and consistent implementation of the EAC Common External Tariff (CET), a framework intended to facilitate regional value addition and encourage intra-EAC sourcing.
Kaheru pointed to Uganda’s 901 stays of application on tariff lines in the current financial year as an impediment to trade, particularly for locally processed goods that meet the criteria for preferential treatment under EAC rules of origin.
The Council also decried the continued use of discriminatory tax policies such as non-uniform excise duties and VAT on goods originating from fellow EAC states.
According to the EABC, such taxes not only inflate the cost of cross-border trade but also erode the competitiveness of regional industries. Harmonising these taxes, they argued, would improve market efficiency, support local producers, and create better-paying jobs across the region.
To prepare for the planned adoption of a single EAC currency by 2032, the council proposed a stronger alignment between fiscal and monetary policies. This, they noted, would help stabilise markets, reduce investor uncertainty, and improve capital flows within the region.
In addition to macroeconomic reforms, the EABC raised concern over the growing scale of illicit trade, which it estimates costs the region more than USD 1.6 billion annually in lost revenue.
The council recommended the establishment of a regional “Track and Trace” system, supported by national focal points, to curb smuggling, protect legitimate businesses, and safeguard jobs.
The EABC further encouraged regional finance ministers to coordinate pre-budget consultations and ensure greater private sector engagement in the planning process. According to Kaheru, such coordination would create policy certainty, improve accountability, and ensure that government spending and tax regimes are aligned with the goals of regional integration.
“Fiscal policies must benefit both businesses and the people,” said Kaheru. “By harmonising taxes and trade regulations, EAC governments can create more jobs, raise incomes, and strengthen the regional economy—with Uganda playing a leading role in this effort.”
Committee Chairperson Hon. Dickson Kateshumbwa, MP for Sheema Municipality, commended the EABC for its timely proposals and encouraged business leaders to take a more active role in national and regional policy discussions.
He stressed that while the government had a role to play, the private sector also needed to assert itself more robustly in driving economic transformation.
“We agree with your recommendations, but the private sector must step up. Engage with us more boldly and frequently. There’s still more you can do, even as you expect governments to act,” he remarked.
The EABC reiterated that its proposals are aimed at deepening regional integration and driving economic growth, which is projected at 5.7 percent in 2025 despite declining international aid, rising geopolitical tensions, and global protectionist trends.
The Council said harmonised fiscal and trade policies will help ensure that regional growth translates into tangible benefits for citizens across East Africa.
The session was also attended by members of the EABC Governing Council, Mr. Kenneth Ayebare and Mr. Oscar Kamukama, who reaffirmed the Council’s commitment to working closely with EAC governments to deliver on the shared vision of a prosperous and integrated East African region.
