The Value added Tax (VAT) applicable in ECOWAS is placed on goods and services. The purpose of the VAT is to generate tax revenues for the community.

 In realisation of the need to raise funds for the sustenance of the community projects and programmes, ECOWAS established the Community levy. The levy of 0.5 percent tax imposed on goods from non-ECOWAS Member States is also used in financing the activities of the ECOWAS Commission and Community institutions.

 When consistently implemented, the Community levy protocol and mechanism would act as support funds base providing the community with the necessary funds to meet a wide range of financial obligations.

 For the year ending 2014, the Community Levy Management Committee adopted a programme of high level missions to Member States to resolve concerns about the implementation of the Protocol on Community levy in the Member States. Owing to the fact that the issue of non-compliance with the Community Levy Protocol has been a major area of concern, the ECOWAS Commission has continued to point at the right direction-getting every member state to comply with its provisions. The implementation of the Common External Tariff is equally important in this regard.

 A regional Custom system is geared among others towards the improvement of the circulation of goods and services. Although there are sovereignty implications for ceding tariff decisions to a regional body, ECOWAS is determined to forge ahead with the Customs Union.  It is at the same time taking into consideration the fears of potential loss of revenue and impact on domestic industry in member States.

 The implementation of activities under the ECOWAS Customs Union programme has focused on work leading to the implementation of the ECOWAS Common External Tariff with effect from 1st January 2015, (ii) formulation and implementation of a strategy with a view to ensuring better implementation of the ECOWAS Trade Liberalisation Scheme while facilitating the harmonisation of domestic and indirect taxes.