Still Racing Toward The Bottom? Corporate Tax Incentives in East Africa
Report for ActionAid and Tax Justice Network Africa (June 2016)
In 2012, ActionAid and Tax Justice Network Africa published a report estimating that East African countries were losing revenues of up to US$2.8 billion a year by providing tax incentives. The 2012 report received – and continues to receive – widespread attention from the media and governments. This new report assesses what progress has been made since 2012 in reducing these tax incentives, and outlines mixed findings. On the one hand, governments have taken some positive steps to reduce VAT-related incentives, which are increasing tax collections and providing vital extra revenues that could be spent on providing critical services. On the other hand, they are still failing to eliminate all unnecessary tax incentives, including corporate income tax incentives given to corporations. Precise figures are impossible to provide due to a lack of transparency, but the evidence gathered suggests that four East African countries could still be losing around US$1.5 billion and possibly up to US$2 billion a year.