Traders welcome tax cuts

Owners of micro businesses in Kigali have commended the government’s decision to reduce presumptive tax from 4 to 3 per cent, albeit reserving criticism for numerous charges they face and poor conditions in the economy that act as barriers to their business’ growth.“Last year, I spent almost everything on paying charges and fees, some of which I don’t even understand why. It becomes worse when one of us misses a deadline to pay a certain charge- instantly the shop is closed and he is made to pay a fine, without consideration that he still has to continue to pay rent even when closed,” a mini supermarket owner at Remera told The New Times on condition of anonymity.Celestin Kambanda, the proprietor of a famous small restaurant in Nyabugogo added that: “truthfully the reduction in tax is a good incentive and although I wish it to be reduced further, it is a good sign for my business.”“However, I am also charged Rwf5,000 per month by the district authorities, a charge I honestly don’t think I should pay because it is over and above the taxes I pay,” he added.Other traders The New Times interviewed agreed with the views and urged Rwanda Revenue Authority to guard against extra and uncalled for charges imposed on small businesses by district authorities.“Business has been improving recently and in a good month, I make about Rwf 1.7 million as profits; I didn’t know about the new changes in tax but I appreciate it. But as you can see, I no longer have a signpost for my business,” Beatrice Mukanyirijira, a bar owner in Remera said, as she pointed to the upside of her bar’s entrance.“The authorities said we must pay Rwf 36,000 to have sign posts of our businesses and after failing to reach an agreement, I opted not to have one.”Private Sector Federation statistics indicate that SMEs comprise about 98 per cent of businesses in Rwanda and account for over 40 percent of all employment in the private sector. According to the Ministry of Trade and Industry, Rwanda has 72,000 SMEs, out of which only a third registered for taxation, although most struggle to survive. In its SMEs development Action Plan, the government focuses on transferring appropriate technologies to SMEs for their development as well as streamlining all fees and taxes.

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Traders welcome tax cuts