Angelique Mukeshimana has to forego lunch on most days as she struggles to make ends meet with her Rwf73,000 monthly salary. She concurs with labour unions on the proposal that only income above Rwf100,000 should be subjected to tax.

Mukeshimana is an officer with the District Administration Security Support Organ (DASSO) currently deployed at one of the local administrative entities in the City of Kigali.

To meet basics like food, transportation, and pay for basic utilities like water and electricity bills, among others, she needs at least Rwf150,000 a month, she says.

"Sometimes I do not have lunch as I realise that I would not be able to meet other needs,” she told The New Times, indicating that a meal is at least Rwf1,500.

Under the draft law amending law nº016/2018 of 13/04/2018 establishing taxes on income, which is currently before Parliament for approval, the Government proposed to double the taxable income cap from the current Rwf30,000 to Rwf60,000 per month.

However, labour unions are advocating for the increase of this cap to at least Rwf100,000 monthly.

This move, they argue, would help many low income workers like Mukeshimana to be able to afford at least the basic standard of living, including food, transport, and accommodation.

While explaining the relevance of the bill to the Chamber of Deputies in November 2021, Richard Tusabe, Minister of State in Charge of the National Treasury at the Ministry of Finance and Economic Planning said the Rwf30,000 threshold (per month) or Rwf360,000 per year was set in 2005 – some 17 years ago.

He indicated that the development is in line with reducing the tax burden on low-income formal workers and promoting employment.

According to the existing law, income not exceeding Rwf30,000 per month is not taxed, while that ranging from Rwf30,001 and Rwf100,000 has to pay 20 per cent tax rate, and above that is taxed 30 per cent.

"As our franc depreciates, we realised it was time to raise that to Rwf60,000 a month,” Tusabe observed.

Africain Biraboneye, the General Secretary of Rwanda Workers’ Trade Union Confederation (CESTRAR) told The New Times that "considering how the Rwandan franc lost value, taxable income should be increased by about five times – to Rwf150,000 a month”.

Much as taxes are needed for the country’s development, Biraboneye indicated that the taxable income should be set after considering the standard living wage – the minimum income necessary for a worker to meet their basic needs.

He pointed out that the plan to increase the taxable income from Rwf30,000 to Rwf60,000 was laudable as it was concerning many people including security agents, but said it was not enough.

"We appreciate the development, but as a labour union, we will continue to make advocacy so that money [taxable income] be increased to at least Rwf100,000, which we think can enable the worker and their family to lead a basic standard of living,” he said.

Ideally, the minimum income for a worker to meet their basic needs was estimated at Rwf130,000 a month, according to Eric Nzabandora, president of Labour Congress and Workers’ Brotherhood in Rwanda (COTRAF Rwanda). For him, only income above Rwf130,000 should be taxed.

He pointed out that the cost of living has been rising, citing prices of commodities and services that people need such as cooking oil, accommodation, and transport which have gone up considerably.

Inability to meet basic needs like food leads to malnutrition of workers and their children, which makes them prone to ailments and child stunting, school dropout and child labour and overtime work as an attempt to find a source of livelihood, Nzabandora argued.

He indicated that the determination of the taxable income should first factor in the amount of money Rwandans need to be able to afford their basic needs.

"We know that taxes are important and the development of a country is largely dependent on taxes, but real development is that which transforms the lives of the citizens for the better. That includes their food security, and education for their children,” he said, warning that stunting negatively affects children’s schooling.