New law to facilitate access to foreign loans

Commerce and Trade Minister Monique Nsanzabaganwa yesterday said that investors will greatly benefit from the recent cabinet resolution that enables companies to get loans from foreign banks. Cabinet last week approved an amendment to the law on direct income taxes to allow investors to borrow cash from foreign banks because they cannot secure adequate loans from local banks to finance their investments in the country. In an interview with The New Times, Nsanzabaganwa explained that Government had come up with the previous law to closely check on the possibility of companies evading taxes, adding that the tax policy committee will now regularly follow to ascertain at what rates the investors’ companies are borrowing the money. “Although cabinet wants the law amended, those fears remain,” she said. “But when you measure and look at what is better and given the current times of the global financial crisis, the best is to let those who want to do outside borrowing to bring their cases for examination by the tax policy committee which examines the rates at the international market,” the Minister said. Clare Akamanzi, the Deputy CEO for Business Operations at Rwanda Development Board (RDB) described the cabinet resolution as another measure that reflects government’s committed to finding ways of improving the investment climate to facilitate investors. “That law used to be relevant but not today, especially with the global financial crisis and liquidity challenges. This is yet another demonstration of an investor friendly government that is ready to tackle issues as they come,” she said. In line with borrowing from foreign banks, the tax policy committee was mandated by Cabinet to process on a regular basis any request made by each investor in collaboration with other state institutions responsible for sectors where such investments are to be made. Ends

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New law to facilitate access to foreign loans