SMEs to get due attention from tax administrators

NYARUGENGE - Experts attending the ongoing International Tax Dialogue (ITD) Africa Conference, have expressed their will to give due attention to Small and Medium sized Enterprises (SMEs) since they constitute a small segment of the taxed economic sector but have potential to contribute more to the revenues collection. Speaking at the opening of the three-day conference, the Minister of Trade and Industry, Monique Nsanzabaganwa said that African countries have to share how best to nurture and tax SMEs. “We are closing in on this very large and yet elusive informal sector…the large taxpayer segment which constitutes less than 5 percent the total tax paying community but from which over 75 percent of the total tax revenues are collected,” said Nsanzabaganwa. She added that the implication here is that SMEs have operated more liberally and can slip in and out of the formality with minimal regulation leaving a heavier burden for the large taxpayer segment. “I believe that SMEs will get their due attention from tax administrators,” she said. The Commissioner General, Rwanda Revenue Authority (RRA), Mary Baine, said that the reason behind this is because most of these SMEs are concentrated in the agricultural sector. “In this case, we expected to develop a tax regime and move on from confrontation to cooperation with SMEs,” said Baine. Ghana’s Internal Revenue Commissioner Maj. Daniel Abalora Quarcoo said; “in Ghana, SMEs contribute a large proportion of revenues collected with about 86 percent yet they are less than 5 percent.” While the head of the Mauritius delegation, Mario Hanneles said that his country has come up with a strategy of tax exemption to the new SMEs as a way of motivating them to keep operational. The high level conference is being attended by tax Commissioners, administrators and policymakers from about 40 countries across Africa and representatives from bilateral and multilateral organisations that deal with tax issues. The ITD conference is a collaborative arrangement involving the European Union, the Inter-American Development Bank (IDB), International Monetary Fund (IMF), the Organization for Economic Co-operation and Development (OECD), UK-Department for International Development (DFID) and the World Bank Group. The conference is aimed at encouraging and facilitating discussions of tax matters among national tax officials, international organizations and a wide range of other key stakeholders, in particular dealing with taxation of SMEs. Ends

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SMEs to get due attention from tax administrators