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Consultant to carry out study of tax regimes in COMESA and their impact on small traders

The Common Market for Eastern and Southern Africa (COMESA) is working with small trader organizations to ensure they fully benefit from the economic integration offered by the Free Trade Areas and Customs Union.

Many of these small traders are described as informal, in that they do not follow the normal border procedures laid down for “commercial businesses”. COMESA designed a simplified system for small traders that enabled them to enjoy duty free access to markets of member states. The uptake of this simplified trade regime (STR) has been disappointing, in part because other taxes other than duty appear excessive to traders and the savings offered under the STR are insufficient to attract many traders to use the proper procedures established.

There is a need therefore to examine the various taxes (including charges of equivalent effect) and costs incurred by traders at the various borders within COMESA to understand the liabilities that small traders face, and to estimate the amount of tax avoided under current conditions.

COMESA therefore seeks to engage a consultant to describe the tax regimes in up to 10 COMESA countries and how they effect the small trader and informal sector, especially at the border. In addition, to develop a methodology to estimate the amount of tax actually paid by the informal sector and the amount of tax avoided (potential tax) fro this sector.

Finally to review VAT refund systems available in each of the countries and how accessible they are to the small informal trader. To advise on how a simplified VAT refund system might be introduced into COMESA MS.

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Attachments:
Tax regimes in COMESA and their impact on small traders