THE TAXABLE BASE: THE APPLICABILITY OF THE LEVY

The taxable base of the AU import levy will be the value of eligible goods originating from a non-Member State imported into the territory of a Member State to be consumed in the Member State. The Revenue collected under the import levy is then remitted in accordance with each Member State’s approved assessed contribution including the Peace Fund.

Any surplus collected by Member States after the fulfillment of obligations under the assessed contribution are to be retained by the State while any deficits between the assessed contribution and revenues collected under AU import levy by a Member State shall be covered by the Member State

The Revenue collected under the import levy is then remitted in accordance with each Member State’s approved assessed contribution including the Peace Fund.

The Peace fund has been allocated three hundred and twenty five million US dollars ($325,000,000) in 2017 expected to incrementally rise to Four Hundred Million US dollars ($400,000,000) in 2020. The Peace Fund will be distributed equally among the five AU Regions as defined in the relevant instruments
Here is an illustration of how the 0.2% levy works: for instance

Take Country X assessed contribution per year as 1$.
From the 0.2% levy, Country X collects 5$ per year.
It’s from the 5$ that the country deducts the 1$ and remits to the African Union.
Also, from the 5$, the country is also obligated to deduct the amount levied on it, by scale of assessment, to contribute to the 65 Million dollars per region (annually) to the Peace Fund contribution.
A key aspect of the 0.2% levy is that any surplus collected by Member States after the fulfillment of obligations under the assessed contribution are to be retained by the State for their own development needs while any deficits between the assessed contribution and revenues collected under AU import levy by a Member State shall be covered by the Member State