Higher taxes across East Africa will stifle economic growth, slow investments
A motorist stocks up some extra fuel at a shell station in Thika town after the 16pc VAT on fuel kicked in. Most stations ran out of fuel in the town. PHOTO | MARY WAMBUI
Uganda is facing an estimated revenue shortfall of $4.4 billion, while Kenya, Tanzania and Rwanda are grappling with budget deficits of about $5.62 billion, $46 million and $448 million respectively.
Funding East Africa’s budgets has been a headache for the regional finance ministers largely due to falling domestic revenue collections and the growing fears over the region’s level of indebtedness.
But economists argue that the new path taken by the governments to balance their books is dangerous as it would stifle economic activities, lead to more job losses, increase poverty levels and make the region uncompetitive in terms of attracting both local and foreign investments.
