Tax competition in East Africa: A race to the bottom?

This publication examines the issue of tax competition in East Africa and its impact on revenue loss, harmful tax practices, and the need for tax incentives. It reveals that tax incentives provided by governments in the region are leading to significant revenue losses and promoting harmful competition, without necessarily attracting foreign direct investment (FDI). The study highlights the importance of reducing unnecessary tax incentives to address revenue losses and strengthen poverty reduction efforts. It emphasizes the need for tax coordination and cooperation among East African countries to avoid a race to the bottom. Recommendations are provided to address these challenges