Weaving Webs for Tax Avoidance

Background to the Study

On 19-20 August 2019, EATGN participated in an experts’ meeting to discuss the ruling on the Kenya-Mauritius Double Taxation Agreement (DTA)1 and its relevance in different jurisdictions. The meeting provided relevant experts with the opportunity to broaden their understanding of the recent court decision that voided the Kenya-Mauritius DTA.

The meeting also examined the possibilities and limitations of this ruling to craft a future strategy in using the

Problem statement

The court ruling against the Kenya-Mauritius DTA is a ground-breaking case in which a CSO won against the government. However, there is little understanding of its impact among members of parliament, academicians, non- governmental organizations (NGOs), faith-based groups and members of the public at large who are interested in fiscal justice debates, especially at a regional level.

The ruling temporarily halted the implementation of the treaty, thereby exerting significant policy influence in the revenue arena, and giving prominence to tax justice advocates’ advancement of innovations or approaches in the fight for better public finance management.

Considering the traditional dominance of governments in making decisions on what, who, when and how to tax, this ruling has opened space for more stakeholder groups to have a direct bearing on how to influence the

outcomes of the case as a framework to help CSOs pursue tax justice by preventing illicit financial flows in the EAC.

Because of these consultations, EATGN committed to engage in the promotion, training, and research of DTAs at the regional level. This decision was based on the opportunity the ruling against Kenya-Mauritius DTA court case provided in developing a new strategy and advocacy efforts needed in challenging harmful DTAs across the EAC.

trajectory of tax policies henceforth. It is now possible to further influence issues in such exclusive spaces on trade and investment rules or promotion through advocacy endeavours like public litigation that demand strict observance of the constitution as seen in the case of Kenya.

Despite this, there is still a lack of awareness, thus an urgent need to have a wider scope of actors getting more involved in tax discussions in the various East African jurisdictions as a way of getting more momentum behind DTA advocacy efforts.

This can be done through building awareness by evidence generation, and capacity building that would help various entities develop adequate policy and make the issue of DTAs more relevant to the ordinary citizen.

It is therefore imperative to ask: what activities and interventions are needed in the medium to long term to push the agenda forward against harmful DTAs in East Africa; what are the political questions linked to the development of DTAs; and how can we develop active participation of broader constituencies in the wider EAC?

Soon after the experts’ meeting, a specific need arose to answer two critical questions following further interactions with EATGN members in Burundi on DTA issues. Other than defining what is a DTA, their purpose and their need to interrogate them, EATGN members asked: how many DTAs do their countries have; and which countries have their governments signed DTAs with?

Based on EATGN’s commitment during the experts’ meeting, this publication is a cursory attempt to begin answering the questions as raised by its members as the beginning of efforts to build contextual evidence, build capacity and publicise the issues surrounding DTAs in East Africa.