The African Free Trade Area Will Negotiate The Settlement Of Tariff Losses

African Co According to the Secretariat of the ntiental free trade area (afcfta), the industry is closely related to the African export im Port bank, afeximbank) to discuss how to establish relevant mechanisms to assist African countries that have lost tax revenue in the short term due to tariff reduction.

Afcfta is scheduled to take effect on July 1, 2020, and will be extended to January 1, 2021 due to the impact of the epidemic. All Member States are currently negotiating through online meetings. In the future, tariffs on more than 90% of goods will be removed among Member States to promote the movement of personnel and capital and form a single customs union.

According to the research of the world bank, after the tariff is removed in the future, the tax revenue of some countries with tariff as the main income will be reduced in the short term. Among the 54 African countries, the tax reduction of 49 countries will not exceed 1.5%, and the total tax reduction of 50 countries will not exceed 0.3%.

The main reason is that the trade volume between African countries is small, and the main tariff source is specific tariff products, so trade protection measures may still exist in the short term. According to the Secretariat of the African free trade area, tariffs must be used as a tool for African countries to foster domestic industrial upgrading and diversified development in the future. Therefore, in the long run, Africa must reduce its dependence on tariff revenue.