New business reforms supportive but more can be done, says private sector

The private sector has expressed satisfaction with the latest business reforms, saying they will significantly improve the investment environment and the country’s competitiveness.

The private sector has expressed satisfaction with the latest business reforms, saying they will significantly improve the investment environment and the country’s competitiveness. 

According to Gerald Mukubu, the Private Sector Federation (PSF) chief advocacy officer, the reforms, announced late last year, will enable traders to cut cost of operations and save. He said promotion of online tax filing or reduction of procedures and documentation required by importers will help entrepreneurs save time and money that would have been spent in queues or moving to different offices for services.

 

Mukubu was optimistic that the country will continue to improve its business environment to attract more foreign direct investments. Mubuku was speaking following a recent sensitisation of private sector members on recent reforms geared to ease business environment in Rwanda. The meeting also discussed other proposed reforms and their impact on business.

 

The new reforms concern business registration, acquisition of construction permits, property registration, and cross-border trade, among others. It is envisaged that these reforms will spur the country’s competitiveness, attract new investments into the country, and support existing enterprises.

 

Commenting on the reforms, Geoffrey Mwine, a trader in Kigali, said the new tax reforms, like the electronic filing and payment systems, will improve the business environment in the country and boost start-ups.

Abdul Ndarubogoye, from TransAfrica Container Transport Limited, said the reforms will have reduced the number of procedures that were causing unnecessary delays. He, however, said there is need to put in place monitoring mechanisms to ensure that all the reforms are implemented, arguing that old habits are hard to break.

“These reforms are good, but sometimes such initiatives ‘stay on paper’ and old practices persist. So, it requires follow up to ensure these reforms are executed,” Ndarubogoye said.

Reforms explained

Aimable Kayigi, the Rwanda Revenue Authority commissioner for domestic taxes, said both the new and proposed reforms are aimed at supporting traders and other investors, especially in starting enterprises and meeting their tax obligations.

Innocent Bajiji, the head of investment facilitation at Rwanda Development Board (RDB), most of bottlenecks that were hitherto being faced by business community were removed. He said the private sector, as a key driver of economic growth, requires support to deliver on the objectives of the second Economic Development and Poverty Reduction Strategy (EDPRS II).

Explaining some of the reforms, Bajiji said the need to obtain electronic signature for those applying to register a business online has been removed after a system update. It now takes six hours to register an enterprise, and it is free of charge.

He added that VAT registration is now done online, noting that taxes can be paid using online or mobile money transfer platforms.

“Importers no longer have to carry cargo release orders and transit documents to present at customs posts,” he said. Other reforms include, obtaining a construction permit (now possible in 20 days, down from 30 days); while property registration (commercial property registration) takes only one day, in one step at the Rwanda Natural Resources Authority.

Rwanda ranks among the top three countries on the continent in the World Bank doing business index.

According to the 2015 World Bank doing business report, Rwanda ranked best in East Africa in ease of doing business, and was third in Africa after Mauritius and South Africa. It was in 46th position of the 189 economies assessed globally.

Statistics show that RDB registered 144 businesses, worth $1,078 billion, last year.

biness@newtimes.co.rw

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