Government unlikely to meet COMESA tariff deadline

The Rwandan government is unlikely to meet a 1 October deadline to implement zero tariffs, as recommended by the Common Market for East and Southern Africa (COMESA), Rwandan radio reported. It cited Finance Minister Donat Kaberuka as saying that although Rwanda supported regional integration, the “cost is high”. He was speaking on his return from a COMESA meeting of finance ministers in Mauritius. “Most countries, when they take such steps of reducing tariffs to zero, compensate by using higher internal taxes like value added tax (VAT).” He warned that country would lose income and that some Rwandan industries could have difficulties adjusting to the new competition. “Therefore, behind this very good objective of regional integration, we have to see what are the compensation mechanisms for countries like Rwanda,” he said.

Meanwhile, Rwandan radio on Thursday reported that the cabinet had approved the introduction of VAT aimed at “removing the complicated multiplicity of taxes and introducing as much equity as possible in the tax system”.