Uncertainty hangs over EA common Budget Day
Arusha. Uncertainty hangs over pre-budget consultations of Finance ministers of the East African Community (EAC) states ahead of tabling of their 2020/2021 national budgets.
While Tanzania is set to reschedule tabling of its national budget later this month - for the first time -, other partner states have not stated on when they will and would probably stick to the traditional second Thursday of June.
“I’m not sure if the meeting will take place as scheduled. Tanzania will table its budget this month,” said the EAC deputy secretary general (Planning and Infrastructure) Steven Mlote when reached on the issue.
He noted the consultative talks among the ministers and senior officials from both the member countries and the EAC secretariat had earlier been slated for today or Wednesday in Arusha.
“There may be some changes in that schedule now,” he told The Citizen, noting that he was not sure if Tanzania had consulted its fellow members in the bloc on the matter.
In recent years, Finance ministers from the EAC partner states would meet in Arusha days ahead of simultaneous reading of the annual budget speeches in their respective countries.
Some quarters have told The Citizen that pre-budget consultations of Finance ministers will be held this week by video-conference during which period, they are also expected to discuss the budget that is to be approved by the East African Legislative Assembly.
The consultations are meant to ensure the budget plans rolled out by each country reconciled with the priority plans of the EAC, especially on taxation issues.
Chief among them is for the partner states to agree on the Common External Tariffs (CET) for goods imported into the bloc from outside.
CET is an 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 with regard to import duty charged.
It is structured under three bands of 25 percent for finished goods, 10 per cent of intermediate goods and zero per cent for raw materials and capital goods.
In addition, there are limited numbers of products under the sensitive list that attract rates above the maximum rate of 25 per cent which range between 35 per cent to 100 per cent.
The EAC CET was last reviewed in 2010 and the three band rate structure was maintained.
However, each year EAC partner states through pre-budget of the Finance ministers has been undertaking annual reviews on specific products.
The consultations by Finance ministers and key officials in the revenue authorities and central banks would normally give a direction on the budgets in the region.
They are held under the aegis of EAC Sectoral Council on Finance and Economic Affairs every May ahead of the tabling of the budgets in the respective National Assemblies in June.
Tanzania has adjusted tabling of the its annual budget to this month ahead of the dissolution of the House on May 29th in preparation for the polls later this year.
With the region reeling under the grave impacts of Covid-19 pandemic, the 2020/2021 budgets are likely to focus on the budget plans to recovery efforts.
Analysts say raising taxes as a primary source of revenue to finance expenditure may be counter-productive as it can dampen economic recovery efforts.
Another intervention option being pursued by the EAC region and other African countries is debts relief to enable them jumpstart the Covid-19 effects.
Others contacted said they were not sure as to whether the traditional meeting of Finance ministers would take place this time around or not.
“Burundi is going to polls in few days. And then there is this problem of Covid-19 which has disrupted many activities at EAC”, one of them told The Citizen.
For the past ten years, Finance ministers from the EAC member countries would meet in Arusha days ahead of the reading of the annual budget speeches.
The consultations are meant to ensure the budget plans rolled out by each country reconciled with the priority plans of the EAC, especially on taxation issues.
With the EA Finance ministers yet to consult ahead of Tanzania tabling of its budget, the date for the EAC Budget reading has not been set by yesterday.
An official of the East African Legislative Assembly (Eala) said they were still consulting with the EAC Secretariat on the issue.
