BUJUMBURA (Reuters) - Burundi sees revenues falling by at least 2.7 billion francs a year after joining a regional customs union but plans to cushion the drop in income by introducing value added tax. Burundi lawmakers have passed a bill allowing the country to have a common external tariff structure like other countries in the five-member East African Community (EAC) beginning July. "The East African custom union will have an impact on the country's budget, but we hope to cover the revenue deficit through an 18 percent VAT (rate)," Finance Minister Clotilde Nizigama told parliament late on Wednesday. Burundi plans to spend 819 billion francs in 2009 and targets 703 billion francs in revenue. EAC's biggest economies - Kenya, Tanzania and Uganda - launched a customs union at the start of 2005. Rwanda is also expected to adopt the tariff structure next month. The bloc is also negotiating a common market that is expected to come into effect in January 2010. The new tariffs will see duty on raw materials zero-rated, from 5 percent at the moment. Capital machinery and their spare parts will also not be taxed. Finished goods will attract duty of 25 percent against 30 percent previously and semi-finished products will pay 10 percent instead of 15 percent. The tariffs for sensitive merchandise such as dairy products, maize, wheat, sugar and rice will remain unchanged, the minister said. Nizigama said joining the customs union will promote investment in the tiny country. | 
