Although mineral prices on the international market are affecting the economy as a whole, it’s also a good opportunity for mining companies.
The poor performance in the mining sector and the layoff that characterized the telecom sector affected taxes, the Rwanda Revenue Authority has said.
In its performance report for the first semester of the 2014/2015 fiscal year (between July-December, 2015), the tax body says the decline in export value of minerals by -42.1 percent contributed to less revenue collections.
“The fall in global mineral prices has led to a much lower taxes from the mining sector that the same period in 2014/2015,” said Richard Tusabe, commissioner general of Rwanda revenue Authority on Tuesday.
The report indicates that revenue collections from mining royalties amounted to Rwf 1.7 billion against a target of Rwf 2.6 billion, a shortfall of Rwf0.9 billion and a 25 percent decline compared to July-December 2014.
According to Central Bank records, the mining sector recorded a decline in both value and volume on account of a 21.1%fall in international metals’ prices on the back of weakening demand, especially in China.
This resulted into the country’s export falling in value by 6.8 percent in value to USD 558.8 million from USD 599.8 million.
Tusabe also noted that the staff layoffs by two Telco companies Airtel Rwanda that laid off 200 staff in December and Tigo Rwanda affected the Pay as You Earn -PAYE tax collections although it exceeded the target by 2.6 percent.
Although it still has a rough tax target in the second semester with a target of Rwf 507.46 in tax revenues, the tax body managed to exceed its first semester target by 102.2 percent collecting Rwf 470.6 billion.
“As you see we have a big task ahead of us and this to increase our efforts,” the Commissioner General said.
To hit the target, Drocelle Mukashayaka, the deputy commissioner for tax payer services, the tax body is looking at enhancing automated systems for local government tax management.
“We will continue taxpayer registration process bringing more taxpayers who are informally involved in business into tax net with the aim of widening the tax base,” she said adding that this will also go alongside more efforts in use of electronic billing machines to up value Added tax –VAT collections.