East African countries risk slowing regional integration if they continue introducing tax policies that conflict with regional agreements meant to promote trade, experts have warned during the sixth East African Community (EAC) Post-Budget Dialogue held in Kampala.
Participants said growing public debt, weak tax collection systems and rising government expenditure are pushing member states to adopt aggressive domestic tax measures, some of which risk creating new barriers to intra-regional trade.
Opening the dialogue, Herbert Kafeero, Deputy Executive Director of SEATINI Uganda, said the discussions come at a critical moment as the EAC begins implementing its new development strategy supported by a regional budget of about $110.86 million for the 2026/27 financial year.
James Magode Ikuya, the Minister of State for East African Affairs, reaffirmed that regional integration remains central to the bloc’s long-term development agenda.
“The EAC integration agenda is being implemented through key pillars including the Customs Union, Common Market, Monetary Union and ultimately the Political Federation,” he said.
He noted that despite financing constraints and policy differences among partner states, there remains a shared commitment to advancing the integration agenda.
Participants observed that tax-to-GDP ratios across EAC member states remain relatively low, ranging between 11 and 15 percent, while debt servicing obligations and public wage bills continue to consume a significant share of national revenues.
During a panel discussion, Uganda Revenue Authority Tax Investigation Officer Justine Namusabi highlighted enforcement challenges affecting domestic revenue collection, including illicit trade, smuggling and porous borders, which continue to contribute to revenue leakages across the region.
Delegates also pointed to taxes on digital services and divergent trade levies among partner states as examples of measures that can unintentionally distort trade flows, particularly affecting small businesses and farmers reliant on cross-border markets.
The dialogue concluded with calls for stronger tax harmonisation across the EAC, with participants urging governments to design fiscal policies that support industrialisation, value addition and regional trade rather than creating unintended barriers between member states.
Basundhara Tripathy Furlong, Deputy Head of Cooperation at the Embassy of Ireland in Uganda, noted that strong stakeholder engagement between governments, revenue authorities, businesses, tax practitioners and citizens has been central to Ireland’s tax policy development.
She added that Ireland continues to support developing countries, including Uganda, through capacity building, technical assistance and institutional partnerships aimed at strengthening tax administration and domestic revenue mobilisation.
