Revenue administrators from several African countries have vowed to simplify their taxation policies and systems in order to partner and collect enough revenue from Small and Medium Enterprises (SMEs) in their respective nations.
The declaration was made yesterday during the end of a three-day International Tax Dialogue (ITD) conference in Kigali.
The Commissioner General of Rwanda Revenue Authority (RRA), Mary Baine, said in an interview that the successful management of SMEs will boost the economic growth of the country while the concerned revenue collecting agencies will also have enough sources to generate more revenue.
“We must invest heavily in knowing who these SMEs are, partner with them and design ways of assisting them; in so doing, we have to keep the dialogue moving,” she added.
“The SMEs are faced with many problems some of which include taxation; this is why we have to draw a partnership with local government authorities and the private sector to assist SMEs in solving their problems.”
On behalf of the revenue authorities, Baine said: “we have to analyse and simplify our systems to enable SMEs graduate to a higher level without the tax burden.”
She however emphasized that the support of SMEs should be taken to the African Tax Administrators Forum (ATAF) as a way of keeping alive their existence.
In Africa SMEs constitute a big number of the taxed segment and according to the Commissioner General of Uganda Revenue Authority, Allen Kagina, SMEs play a significant role in the growth of a nation’s economy.
She called for more focus on the revenues within the informal sector saying businesses operating outside the formal economy are a general concern to the governments and tax administrators.
“We need to simplify our systems of taxation of SMEs since our borderlines are quickly disappearing; complicated tax systems normally lead to high level of informality,” said Kagina.
Zimbabwe’s Revenue Authority boss Gershem T Pasi said SMEs across Africa face almost the same challenges but the difference is in the approach in solving the challenges.
“Rwanda’s Fiscal Decentralization Council (FDC) seems the best approach in solving SMEs and this is the proper way of utilizing the information from taxpayer,” said Pasi.
Revenue administrators who attended the ITD concurred that the conference changed their understanding of SMEs and how they should be taxed.
The ITD-Africa Conference attracted experts, Commissioners, tax administrators, and senior officials from 23 African counties and was aimed at encouraging and facilitating discussions on tax matters among national tax officials, international organizations and a wide range of other key stakeholders, in particular those dealing with taxation of SMEs.