Small traders call for tax cuts, funding in 2015/16 budget

As government prepares to present its 2015/16 financial year budget estimates on June 11, small city traders expect Finance Minister Amb Claver Gatete to prioritise areas that will provide solutions to the challenges affecting businesses.
Eugene Musinga, a financial manager at TMM Sound Company in Nyarugenge District, expects government to reduce taxes for small businesses in the next budget. (Jean Mugabo)
Eugene Musinga, a financial manager at TMM Sound Company in Nyarugenge District, expects government to reduce taxes for small businesses in the next budget. (Jean Mugabo)

As government prepares to present its 2015/16 financial year budget estimates on June 11, small city traders expect Finance Minister Amb Claver Gatete to prioritise areas that will provide solutions to the challenges affecting businesses. 

A number of small-and-medium enterprise (SMEs) operators interviewed by Business Times in a mini-survey conducted last week, say the government should review the tax regime and prioritise the production sectors of the economy in the coming budget to spur local production.

They also expect the government to announce policies that will support enterprises and boost local industrial growth.

Jean Pierre Nduwumuremyi, a shopkeeper in Kimihurura sector, Gasabo District, said government should support the agriculture sector to improve production. Nduwumuremyi added that the local production of some crops, like Irish potatoes, does not satisfy the market demand and that causes price hikes that discourage clients.

He also said the government should provide more funds to support SMEs in the next budget.

Jean Paul Nduwayo, a trader in City Market, said the government should provide more support and incentives to the manufacturing sector to boost industrial growth.

Eugenie Nyiramana, a trader at Kimisagara Market, Nyarugenge District, decried poor infrastructure at the market, saying it is affecting business operations. Nyiramana said the market has no parking lot for customers, which discourages some from coming to the market.

Ange Giramata, a shopkeeper in Kimironko, Gasabo District, said most of the people who start businesses have no skills, calling on government to provide for training in the budget, arguing that this will boost capacity of business owners.

Jean Baptiste Hakizimana, the manager of Good Hope Forex Bureau, said government should cut taxes, and promote exports to enhance foreign exchange inflows into the country to ease pressure on the local currency. He said forex traders pay 30 per cent income tax, supervision fees of Rwf300,000 per year, besides Rwf600,000 monthly rent, which he said was affecting their earnings.

Eugene Musinga, the finance manager of TMM Sound Company in Nyarugenge town, also wants government to reduce taxes, adding that most SMEs could close shop because of taxes and other operation costs.

In the next fiscal year, government projects to raise Rwf938.6 billion from tax revenue, up from Rwf906.8billion this financial year.

PSF roots for business facilitation

Re-echoing expectations of SME operators, Benjamin Gasamagera, the the Private Sector Federation (PSF) chairperson said government should improve business infrastructure, and put in place mechanisms that would help increase production to meet local and regional demand.

“A good working environment is essential for businesses. That is why we are advocating for adequate facilities,” he said.

Gasamagera encouraged traders to join co-operatives to overcome challenges like access to finance.

According to the government budget framework paper for the next three years, the next budget will focus on addressing energy supply constraints, prioritisation of infrastructure towards productive uses; implementing a private sector-led approach to exports and intensifying efforts to increase agriculture productivity.

Expert’s view

Charles Sebaruma, a macroeconomics lecturer at University of Rwanda’s College of Business and Economics, advised PSF to continue lobbying government for better tax policies and continued improvement of the business environment, saying he does not expect any tax cuts.

The don, however, argued that a supportive tax regime is essential for businesses, especially SMEs, to thrive, expand, and boost the whole economic growth.

He also said the government should clearly explain taxation policy to business people so they understand it and stop grumbling.

business@newtimes.co.rw

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