Business community pushes for law reforms

The business community is calling for revision of laws deemed to stifle business growth in the country.Members of the fraternity made the call at the opening of a two-day conference on the role of law reforms in doing business yesterday at Parliament Buildings in Kigali.The private sector said its unfair to pay withholding tax (15 per cent) and penalties were heavy for delays in tax declaration and on uncompleted contract work among others.Anne Rwigara, from the Rwanda Association of Manufactures, said the plastic bags’ ban is good for the environment but it should be closely monitored to avoid its abuse.John Bosco Kanyangoga, a mining sector stakeholder, said government has done well but there were still concerns.Duplicated aspectsHe said the ITRI Tin Supply Chain Initiative (iTSCi) and the regional certification mechanism that applies to mining operators seem like a duplication, which leads to more costs of doing business.“There is a need for audit standards and other technical operations to be harmonised to reduce the costs and avoid audit fatigue that mining operators in Rwanda could be subjected to in the near future,” Kanyangoga said, adding that a four per cent royalty fee is also high.“There are many suppliers and cooperatives without a TIN number. This is a challenge to construction companies and others because about 40 per cent of the materials are supplied under such circumstances, yet the suppliers pay taxes in their respective districts. Construction companies end up paying taxes that shouldn’t be attributed to them,” he said.Kanyangoga called for measures to ensure all suppliers acquire TIN numbers; and if the 15 per cent withholding tax is to be paid, then the district related taxes should be exempted.He said it would be in the interest of all parties if the tax was reverted to 10 per cent. The mining sector is the country’s second largest foreign exchange earner. In 2011 and 2012, it generated $162 million and $136.3 million, respectively. The sector employs about 120,000 people.Laws on SaccosJean Marie Vianney Nzagahimana, the chairperson of Association of Microfinance Institutions, called for modification of the law on microfinance to allow Saccos to open branches beyond their areas of operation. Pointing out difficulties with registration of securities, Nzagahimana said the services of the registrar general may be decentralised to districts.He also called for gradual increase of the number of commercial courts to ensure that the business community is closer to judicial services.The conference is expected to examine all concerns and come out with recommendations.The Minister for Finance, Amb. Claver Gatete, who was a panelist at the conference, said the issues the business community raised were cross-cutting.The minister assured that solving the problems was not difficult, especially given the nature of the public-private partnership culture of dialogue.Create fertile groundDr Jean Damascene Ntawukuliryayo, the Senate president, urged for objective assessment of issues.“No government can live without taxes; let’s not just ask for tax exemptions, but rather, find ways of creating an environment that allows us to earn more so that we pay more taxes,” he said.The World Bank, in September recognised Rwanda as the most tax compliant country in East Africa. In a report, the Bank said Rwanda is the easiest country to pay taxes in the region, with just 17 payments made annually.Regional countries Burundi makes 25 payments, Uganda 31, Kenya 41 and Tanzania 48. The report ranked Rwanda the 25th most tax compliant country out of 185 that were surveyed.

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Business community pushes for law reforms