Delays by Ratification Examining Regional Harmonization of the East African Community (EAC) Double Taxation Agreement

The focus on regional tax harmonization, exemplified by the East African Community (EAC) Double Taxation Agreement (DTA), reflects a global acknowledgement of the need for congruence between national tax systems and evolving economic interdependence. Nations worldwide engage in harmonization processes, often through bilateral or multilateral agreements, with DTAs being a prevalent tool. These international accords aim to allocate taxing rights, mitigating instances of double taxation resulting from overlapping tax laws. Despite their significance, DTAs face challenges such as interpretation disputes, the "ratification process," and intentional abuses like tax treaty shopping. The discussion paper explores issues arising from the EAC DTA ratification process, emphasizing the importance of member states ratifying the agreement for tax harmonization. Recommendations are proposed to enhance the effectiveness of the model DTA as a tool for fostering harmonized taxation practices.