MUHANGA — The district has been charged for over taxing the business community. This caused the recent blocking of the tax increase by the Business Development Services (BDS) an organ under the Private Sector Federation (PSF).
David Rutambuka, an official with BDS in the district said the district had increased the charges for a trading license commonly called Patenté from Frw20,000 to Frw40, 000, up the annual legitimate charges. The increase is contrary to the tax law.
The tax law stipulates not more than Frw20,000 Patenté in the rural areas.
However, Celestine Bumbakare, the Rwanda Revenue Authority (RRA) Director in Charge of Domestic Taxes, referring to tax law number 33/2003, 60-09-2003, told The New Times that, "the law allows districts to set any rate of Patenté depending on the nature of business."
Rutambuka explained that BDS’ concern was that the district officials could not justify the two-fold increment.
PSF in the 2008 budget paper raised concern on the issue of district authorities charging illegitimate taxes. The issues was brought to the attention of the Ministry of Finance and Economic Planning.
Besides rendering business development services, BDS also advocates for the business peoples’ interests. Rutambuka says PSF in Muhanga district did the advocacy, after critically analyzing what the law stipulates. They reportedly wrote to the Mayor of Muhanga informing him of the matter and gave a copy to the governor of the Southern Province.
The Governor then directed the Mayor "to respect the tax law, which stipulates not more than Frw20,000 Patenté in the rural areas."
Rutambuka said there are about 600 members of the business community in the district, meaning ‘if BDS had not intervened they were about to be ripped of Frw12million in total.’