Goods originating from Kenya, Uganda and Burundi receive import duty reductions from Rwanda since they are members of COMESA. Tanzania will receive the same treatment following Rwanda’s admission into the EAC

Government will reduce import duties on goods originating from Tanzania, from 36 percent, to 6 percent, according to James Musoni, the Minister of Finance and Economic Planning.

Musoni who was presiding over the ‘Investor and Exporters’ Awards’, at Kigali Serena Hotel on Friday said the tax incentive will be effected by next year.

The move will definitely affect Rwanda’s fiscal budget. However Eugene Torero, Deputy Commissioner General of Rwanda Revenue Authority (RRA) said there won’t be a big impact.

Torero who is also Commissioner of Customs said that Rwanda has reduced taxes on goods originating from Tanzania in respect to the World Trade Organisation’s (WTO) most favoured nation principle.

The principle grants trade advantages like low taxes to a nation which is in the same trade block with other nations which receive the benefits.

Goods originating from Kenya, Uganda and Burundi receive import duty reductions from Rwanda since they are members of COMESA. 

Tanzania will receive the same treatment following Rwanda’s admission into the East African Community (EAC).

This tax incentive will sound as good news to importers in Kigali but particularly to consumers who will possibly benefit through reduced prices.

Minister Musoni also said that government is implementing a number of reforms to ease doing business in the country.

"Over ten legal amendments are being considered in parliament. These laws, among others, will remove a surcharge on sugar, reduce delays in audit in case of refund or issue-oriented audit,” he said.

He added that that, "we have also talked head-on, the lengthy procedures and requirements in cross boarder trade to this end, some of the reforms implanted include self assessment and taxes declaration by tax payers, blue channels, pre-clearance and pre-payment of taxes, as well as increased working hour from eight to 16 hours.”

Already a tax issue forum has been established where the business community and RRA can constructively engage on tax issues.

"We wish this forum to be utilised adequately, and feedback into the policy making,” Musoni said.

The initiatives are also viewed as a big boost to Rwanda’s competitiveness on the global market using a world bank doing business report.

"Our immediate target for the next assessment is to become among the top ten reformers, and we are committed to achieve it,” Musoni said.

"However, it remains critical that this be done in partnership with the private sector, and that culture of constructive engagement be strengthened in order to develop true partnership culture,” he added.

He said that parliament is currently debating some key commercial laws such as the new company’s act and the law on secured transactions.  

The minister challenged the private sector to reform some of the ways in which they conduct business to ensure trust and transparency with government, strongly condemning tax evasion attempts by some companies.

"The private sector needs to fulfill its obligation as responsible private operators contributing to our economy. This bad practice ultimately erodes the national tax base. We have also had some companies that fail to honour their regulatory obligations and instead choose to politicize it,” he added.

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