The introduction of any new fiscal measures needs to take into consideration the dual role that such measures play.

New tax rules, or amending existing rules, can be used both as a means to increase a country’s revenues, but also as a tool to attract investment. It is important to point out that such measures cannot be introduced in a vacuum and without understanding the country’s long term economic plans and vision.

The same can be said when developing a new ecosystem, such as the gaming industry. The gaming industry may be an important boost to the country’s coffers, however it is a highly technical and specialised industry, and it is therefore important to be able to attract both the large companies to Rwanda, but also the right individuals. This is where tax policy can act as an attraction of investment, not just for the companies but also for individuals.

Rwanda would need to import technical knowledge and would require that that knowledge is transferred to the local workforce.  Tax programmes specific for certain technical posts within the gaming industry may be introduced to lure talent into the country.

A number of countries which have successfully developed similar industries, have introduced rules for high qualified and technical individuals with beneficial tax rates on the salaries they generate from the industry.

Such benefits may also be capped over a number of years so that the company which employs these individuals is required to ensure that the knowledge is transferred to local employees who would be able to take on such roles within a number of years. Incentivising the setting up of training academies, and lecturers within such academies, will speed up the transfer of knowledge, which is key to develop a successful new industry.

The success of an industry such as the gaming industry, could have a snowball effect on other industries, as more individuals relocate to Rwanda increasing the demand for other ancillary services – the accommodation and hospitality industries is one which has a lot to gain from the success in gaming.

Residence programmes for individuals who come to work in Rwanda can also be introduced – these need not be specific to an industry, but one might want to structure them in a way that they would be applicable to foreign individuals above a certain salary, in order to ensure that Rwanda continues to attract quality to the country.

Start-ups are the driver of any economy. The introduction of start-up visas in a number of countries have been extremely successful in attracting start-ups and also the visionary leaders who are founders of these companies. Tax incentives could also be provided to start ups, whether within certain industries or not, as a way to attract them.

Naturally, beneficial tax programmes alone will not be enough to attract foreign talent, however Rwanda definitely has what it takes to continue to bring investment into the country and knowledge in highly technical industries as is the gaming one.

The writer is a co-founding partner of Seed, an internationally focused research-driven advisory firm based out of Malta, Europe.

www.seedconsultancy.com | jp@seedconsultancy.com | 

nicky@seedconsultancy.com