SADC has adopted guidelines on tax incentives, and one of the guidelines is that whatever incentives you offer cannot negatively impact on other member states,? said Lincoln Marais, a director for institutional development at the African Tax Administration Forum (ATAF) in Pretoria.
Launched in Kampala in 2009, ATAF is an institutionalised network of African tax administrators promoting cooperation, knowledge sharing and capacity development among members.

?In trying to attract investment, African countries offer so much that they basically get nothing out of the deal,? said Marais. East Africa is one of the regions hardest hit by tax incentives.

Last year, Action Aid international, an international NGO, released a report titled; ?Tax competition in East Africa: A race to the bottom?? that implicated East African countries for competing against each other in providing tax incentives.

On Uganda, the report said the country?s revenue losses from tax incentives and exemptions ? at 2% of GDP, as measured by African Development Bank ? amounted to almost twice the entire health budget in 2008/09 financial year.

Unrealistic tax incentives are hurting tax prospects of many African countries, with international debate on the subject gathering momentum.

?Developing countries should be able to reap the benefits of more transparent tax systems,? G20 leaders said in a communiqu? after their recent summit in Russia. One of the problems of incentives is that they are not given in transparent ways in Africa, officials said.


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