Government has been cautioned to critically assess the adverse impact the African Continental Free Trade Area (AfCFTA) may have on revenues, particularly Value Added Tax (VAT), Import Duty and Income Tax. One critical action plan for the success of the treaty is to create a single market to progressively eliminate tariffs and non-tariff barriers to boost intratrade on the African continent.
However, a tax analyst, Timore Francis Boi, has warned that in spite of the anticipated benefits, there could be potential tax leaks since the treaty may not benefit every participating country, especially those with fundamental challenges in manufacturing and industrial sectors. “The danger is that it is likely to cause undue concentration of economic activities in a few African countries with low production cost and this can cause economic imbalance among the member countries,” he said explaining that “investors will want to set up in countries with lower production
cost and thereafter export finished products to other African countries.” Read More.
