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Boston University School of Law

Faculty Scholarship

2013

Business Organizations Law

EAC

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Vat -- East African Community: The Tradable Services Problem World-Class Solution, Richard Thompson Ainsworth, Goran Todorov Aug 2013

Vat -- East African Community: The Tradable Services Problem World-Class Solution, Richard Thompson Ainsworth, Goran Todorov

Faculty Scholarship

The value added taxes (VATs) of the East African Community (EAC) are open to manipulation and are leaking revenue from tradable services transactions. The EAC’s response has been to adopt a unique Reverse VAT mechanism. Something more is needed – a Digital Invoice Customs Exchange. Together these adjustments will provide a world-class solution to a world-wide problem. The EAC appears to be moving in this direction.

The vulnerability of the EAC VATs to tradable services is not surprising. The EAC borrowed VAT designs from the major VAT models, the EU VAT and the New Zealand Goods and Services Tax (NZ …