Business Daily (Nairobi)
16 June 2008
editorial
Tanzanian lawyers have a good reason to smile after their Finance minister exempted them from value added tax for export of their services.
On the face of it, this is a purely Tanzanian affair with little relevance to non-nationals.
This is only true until one realises that this tax measure gives the country's legal practitioners an incentive to export their trade to neighbouring countries.
And with the ongoing integration of the regional market under the East African Community; Kenyan, Ugandan, Burundian and Rwandan lawyers have cause to worry.
This move by Tanzanian authorities is even more significant when one looks at the hurdles that the authorities have placed on foreign nationals seeking to practice law in the country.
While Kenyan law, for example, allows lawyers admitted to the Tanzanian and Ugandan bars to practice in Kenya, the two neighbours have not reciprocated this gesture.
This restriction of free movement of labour has not augured well for the region as it has allowed inefficiency to persist in the services market.
There can be no doubt that opening up the services market to cross-border competition can only be to the advantage of consumers and add to the pool of knowledge that there is in these sectors.
This newspaper believes that while the tax exemption is a plus for the regional integration project, its full potential is unlikely to be realised until EAC member states open their markets to professionals from neighbouring states.
Fear of swamping
The fear of swamping that has prevented Uganda and Tanzania from opening up their markets is unfounded since the truth is that the indigenous lawyers have a big advantage over their colleagues when it comes to doing business at home.
Increased interaction among lawyers in the regions will, however, ensure a more robust system of justice that is alive to emerging regional issues.
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