Importers and exporters in the country have complained of the rampant corruption and Non Tariff Barriers in other East African Community member states, which they believe, has not only affected their businesses, but also dogged regional integration.
Though Article 13 of the Customs Union Protocol of the EAC instructs partner states to eliminate all existing non-tariff barriers to trade and not impose any new ones, this has allegedly not worked as more countries continue to overlook it.
Jean Pierre Gakuba, a hardware importer, told The New Times that due to corruption, Ugandan and Kenyan traders in Rwanda tend to skip or pay lower tax to customs bodies, which allows them to sell their products cheaply thus outcompeting Rwandan traders.
“I used to import materials from Dubai but now I have resorted to Nairobi,” he said.
He said that due to corruption, larger competitors from Kenya, Uganda and Tanzania are able to sell their products in the country at lower prices despite associated transport costs because they enjoy the benefits of economies of scale on top of incurring lower production costs.
The traders were also concerned about the high taxes levied by the Rwanda Revenue Authority.
The latest East African Bribery Index 2011 ranked Burundi as the most corrupt nation with a score 37.9 percent, Uganda and Tanzania were at 33.9 percent, Kenya recorded a slight improvement at 28.8 percent down from 31.9 percent in 2010 while Rwanda scored 5.1 percent, down from 6.6 percent last year.
An official from SULFO Rwanda Industries, who preferred anonymity, pointed out that besides corruption that hinders national traders, non tariff barriers are also prevalent in some regional countries.
Sulfo is a local manufacturer and distributor of assorted consumer goods that it exports to Burundi, DRC, Uganda, and Tanzania.
“We import raw materials from Uganda, but roadblocks and weighbridges are everywhere, especially from Mbarara, and you have to pay at each one of them,” he said.
He further narrated that when they balance all the costs, including transport, production, corruption and taxes in the country, it affects their expected income and dampens their business growth.
Value Added Tax in Rwanda, Uganda and Tanzania is 18 percent, Burundi 17 percent, Kenya 16 percent.
He said that unless stakeholders like Rwanda Revenue Authority, Ministry of EAC and the Ministry of Trade and Industry intervene, local traders would remain disadvantaged.
When contacted for comment, RRA’s Deputy Commissioner and Commissioner for Customs, Richard Tusabe, urged the traders to submit their complaints to the responsible authorities for themto be resolved.
“They should come to us, and we engage all stakeholders; if corruption in these other countries is affecting them, we can forward a proposal to the EAC Secretariat to review all these challenges,” said Tusabe.
“EAC laws can be reviewed; it’s not like a bible.”
On taxes, he insisted that the tax body cannot exempt the business community from paying taxes adding that they should be bound by the national taxation policy, which is in the interest of all Rwandans.
Paul Mutabazi, an importer shoes from Kampala, however deferred from his colleagues on prices.
“It depends on the quality of the products you’re selling. As long as you have first class products, consumers will always come for you even if your prices are a bit high,” he said.
He added that he competes favourably with other regional traders as he deals in quality products.
In 2007, the East Africa Association of the Anti corruption Authority (EAAACA) was formed to promote the spirit of zero tolerance against corruption and encourage regional cooperation in preventing and combating the vice.
Tito Rutaremara, the former Ombudsman turned Senator and a board member of EAAACA, advised the local traders to approach him so as to forward their complaints in all member states to seek a solution.
“Countries like Burundi, Kenya and Tanzania have always submitted their complaints to our association and their problems have been solved…the traders therefore should come to us. We shall send our team to investigate and get a common solution,” he urged.