To ease doing business, World Bank recommends lower tax reforms and simpler administration process for countries in East Africa.

According to the Doing Business report in East Africa, businesses in Kenya are heavily taxed with demands of about 49.6% profits going to tax. Similar demands are made in Burundi, Tanzania, Uganda and Rwanda where 46.2%,45.5%,35.7%,and 31.3% are charged respectively.

World Bank posits that high taxes in East Africa may discourage investors as studies have shown that higher tax rates are associated with fewer formal businesses and lower private investments.

“Keeping tax rates at a reasonable level can encourage the development of the private sector and the formalisation of business. This is particularly important for small and Medium size enterprises, which contribute to growth and job creation but do not add significantly to tax revenue,” the report stated.

On encouraging simpler administration, the Washington based institution says too many types of payment may turn-off investors as too much time is wasted in the system. The number of payments indicates the frequency with which the country had to file and pay different types of taxes and contribution.

In East Africa, Tanzania has the highest number of payments at 46, followed by Kenya, Uganda, Burundi and Rwanda with 41,32,24, and 18 payments respectively.