The government has slashed the annual presumptive tax for businesses with an annual turnover between Rwf12 million and Rwf50 million, from 4 per cent down to 3 per cent.The move is part of the tax reforms promised by the Ministry of Finance during the reading of the 2012/13 budget, last June. It is expected that the new development will help improve tax collections through honest declarations and the opening of new start-ups. The development is part of a broad policy to create a better working environment for Small and Medium Enterprises (SMEs), which are increasingly becoming central to the country’s development process. Government is also trying to further ease access to financing as well as provide advisory services to small businesses.While the country has made commendable strides in creating a legal framework that favours businesses, becoming one of the world’s top business reformers and third easiest place to do business in Africa, there is need for further improvement to help ensure that more establishments continue to grow. Improving the tax regime is certainly an important aspect in that regard.In the meantime, the government has brought into force the recently introduced Gaming Tax, which will see operators pay 13 per cent on all gaming activities, including betting and casino activities, besides a withholding tax of 15 per cent to be deducted from the lucky winner’s jackpots. This is expected to raise at least Rwf1 billion in taxes in this fiscal year, and paves way for more multimillion investments in this budding business.In both cases, the economy will benefit immensely from the broader tax base, however, to get the best out of the reforms, it is important that tax payers are continuously sensitized about the obligations to pay taxes.
