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Business owners welcome President Kagame’s call on easing taxes

The private sector has welcomed President Paul Kagame’s appeal for easing taxes in the country.

President Kagame on Monday, January 9, tasked relevant authorities to review taxes so that ordinary people and businesses are not overstrained.

“I don’t see any reason why this issue [high taxes] cannot be examined,” Kagame said, adding that high taxes do not necessarily imply more tax revenue. The President tasked the entities responsible for taxation policy and legislation to consider all possible ways that can immediately address the problem.

Business owners including Divine Munyana, a clothes shop owner in Gasabo District, welcomed the fact that the President acknowledged that there is a problem as high taxes are negatively impacting private businesses’ growth.

According to Munyana, high tax rates affect the whole business process.

Munyana said: “When taxes are high, rent increases, prices increase and then shopping is considered as luxury. When that happens, we get fewer clients since people are more focused on buying what they consider as their most necessary goods. In doing so, we are making losses and eventually go out of business.”

Celemantine Tuyishime, a cooking gas dealer in Kimironko, said that gas has been a basic need since most people don’t use charcoal anymore but the prices of gas have been rising rapidly especially when petrol prices rise.

“When fuel prices go up, consumers are hurt directly, but also indirectly when higher transportation costs raise prices on everything from food to diapers to construction materials,” she said.

Emmanuel Hakizimana, a taxi motor operator, said it is good that the government is going to reconsider the current tax rates.

Hakizimana said: “Not only business is being affected. Even the standard of living is affected. I have three children at home who have to eat at least two meals a day and this is difficult, with the high prices of food commodities nowadays.”

Victor Mberinkindi, the Manager at Kaizen Hotel, said that: “When the taxes rise we don’t make the same profits, since customers reduce, yet the prices at the market are still the same. And when this happens we reduce the number of staff, hence, the level of employment is also impacted.”

Damien Ndizeye, Executive Director at Rwanda Consumers Organization, said that the number of taxpayers in the country is still small yet the amount taxed is high.

He said: “The government should lessen the taxes and increase the number of taxpayers rather than charging high amounts from a few businesses.”

A new proposal submitted by the Rwanda Revenue Authority (RRA) could, among others, see a decrease on land taxes (immovable properties), as well as the current rates of the corporate income tax lowered.

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