As Member States of SADC become more Regionally Integrated, disparities in their national tax systems may cause inequities that contradict SADC’s objectives of economic growth and complementarity between national and regional strategies. To correct this situation, SADC passed its Memorandum of Understanding on Cooperation in Taxation and Related Matters on 8th August 2002.
This Memorandum of Understanding highlights the importance of SADC Member States harmonising their tax regimes and cooperating on tax matters in order to improve regional economic performance. Member States agree to establish a tax database with detailed tax information for the region, to develop the expertise of the region’s tax officials, and to harmonise policies on tax incentives, tax treaties, and indirect taxes to spur growth of the region as a whole.
The Memorandum of Understanding also provides measures for programme review, amendments, and settlement of disputes, all as a precursor to an official, comprehensive Protocol on Finance and Investment.