Rwangombwa challenges PSF’s “shallow” budget position paper

The Minister of Finance, John Rwangombwa has described the budget position paper by the Private Sector Federation (PSF) as not representative of the whole private sector. Last week PSF, the umbrella organ of the business community, presented a paper to the Ministry of Finance, among other things, pushing for excise duty cut on beers that use local raw materials by 40 percentage points to 20 percent from 60 percent.
Finance Minister, John Rwangombwa (File photo)
Finance Minister, John Rwangombwa (File photo)

The Minister of Finance, John Rwangombwa has described the budget position paper by the Private Sector Federation (PSF) as not representative of the whole private sector. 

Last week PSF, the umbrella organ of the business community, presented a paper to the Ministry of Finance, among other things, pushing for excise duty cut on beers that use local raw materials by 40 percentage points to 20 percent from 60 percent.

“This is an incentive for breweries to promote utilisation of local raw materials and avoid spending the huge amount of money allocated to these imports made outside Rwanda. 

This will encourage the Rwandan beer industry to develop a supply chain based on locally produced raw materials,” the PSF Chairman, Robert Bayigamba said.

The chairman had also stressed that issues of delay in refunding VAT, unfair charge of VAT on insurance premiums were also chocking the private sector.
 
However the Minister said that the presentation was not inclusive of all the private sector views and urged them to always make consultations to ensure that all stakeholders are involved in the drafting process.

“We don’t see this position paper representative of the private sector; we want to see it more representative next time,” he said, adding that he was dismayed by the presentation which lacks mostcritical views of the entire sector.

Rwangombwa added that the government is heavily investing in agriculture to woe the financial sector to provide credit to farmers as a way of minimising the risks of credit extension to the sector.

The minister further noted that the sector is still facing challenges of energy and the government has plans to encourage local investors into energy investment.

“I know you still have big challenges in the energy. We want to encourage the private sector to invest in energy to help us resolve the problem of lack of energy to drive our economy.”

The government is currently investing in methane gas extraction, training of hydro power engineers to boost mini hydro power projects and is currently looking into manufacturing of its own hydro turbines
to increase national power grid.

While VAT on petroleum product has been exempted, PSF is pushing for a zero rated tax.

“VAT paid on other expenses related to the petroleum sector such as maintenance of stations, building of new stations, telephone can’t be claimed at RRA and collected back. 

This has resulted in extra expenses and an erosion of cash flow while the pump prices are regulated by the Government,” the Chairman said.

He also highlighted the delay in payment by public institutions, Infrastructure, Import (customs) duties on transport buses and exemption of importation of right hand vehicles as some of the issues that should be looked into in this financial year’s budget.

Ends