Rwanda will lose about 200 billion Rwandan francs ( $212 million) tax revenue between March and May this year due to COVID-19 disruptions, an official said Monday.
The revenue loss according to preliminary figures will be more than 200 billion Rwandan francs due to tax exemptions announced by the government recently, Aimable Kayigi, commissioner of domestic taxes at Rwanda Revenue Authority said during a Rwanda Television news program.
A commercial motorcycle pays 60,000 Rwandan francs annually for example but because of exemptions due to lockdown each one will be exempted from paying one third of this year’s taxes equivalent to 20,000 Rwandan francs, he added.
Government decided to waive the taxes in order to save people’s jobs, it is a short-term measure as more measures are being studied, Richard Tusabe, the minister of State in the Ministry of Finance in charge of the National Treasury said.
The ministry of Finance and Economic Planning Saturday announced a series of tax exemptions, aimed at supporting different sectors of the economy to recover from the effects of Covid-19 pandemic.
The tax exemptions covers Pay As You Earn (PAYE) for a period of six months from April to September for teachers in private and employees of companies operating in the tourism and hotel sector schools earning up to 150,000 Rwandan francs net salary ($161).
The government also exempted masks made in Rwanda to prevent COVID-19 spread from paying Value Added Tax (VAT).
Also, transport motor vehicles will pay their quarterly fixed personal income tax this year pro-rata to the period of operation, according to the ministry.
VAT is charged at 18 percent while corporate and income tax is charged at 30 percent.
Rwanda’s economic recovery plan released to the media last week by the Ministry of Finance and Economic Planning shows that government needs 800 billion Rwandan francs, ( $ 833.6 million) for period May 2020 to December 2021.