New tax regime will facilitate economic growth

Editor,Many small and medium businesses have not been paying taxes not because they really want to evade but, as RRA very correctly put it, it is because they simply couldn’t operate under normal procedures and survive. Tax evasion in Rwanda is one very difficult and painful option any businessperson can take. The price includes prosecution, perpetual fear, terrible fines... the list is endless. But for most of these small businesses, RRA bears the biggest blame for making them tax evaders. RRA is finally doing the right thing. Keeping records, doing periodic audits, filing this after that return is not only too technical for them but they are also very expensive. Ask any accountant, auditor or lawyer what they charge for their services. You perhaps think you have done a simple good thing for small businesses and taxation; in my view, you have probably made the most important economic decision of the decade. If, according to your own statistics, 98 per cent registered businesses are micro, then you have to do whatever it takes to keep them going and growing because they sustain this economy. Check out Kikuubo, Wandegeya, Ntinda and Natete suburbs in Kampala, you will find many people who perhaps moved their small businesses there from Remera, Kabeza, Gatsata or Nyagatare.RRA, get your people talk to them and hear their stories and engage them. Without a doubt, I know more than a dozen who will return as soon as this new taxation regime takes effect. Now you sensitise them properly, give yourself a short and medium time and watch the numbers. I can guarantee that small businesses will now become stable, will emerge from their hideouts and expand the tax base, will pay their taxes voluntarily, will create jobs, purchasing power will go up, will look to RRA as ally, send more children in schools, other things like building of medium homes and commercial farming will spring up. Small businesses have proven to be the backbone of even large economies of this world including USA, Brazil, and India. There may be certified tax evaders and smugglers who will take advantage of this dispensation. This happens everywhere in the world but the long arm of the law eventually catches up with them. Let them not divert RRA from supporting the 98 per cent.Hope, Kigali (Reaction to the article, ‘More tax cuts for small businesses’, The New Times, October 10)

Opinions

New tax regime will facilitate economic growth