In the framework of increasing private sector involvement in economic development, Gasabo district has taken an extra mile to discuss issues affecting the business community operating within area. In a public private dialogue held on 23rd June 2015, the mayor together with PSF leadership in Gasabo went into dialogue to address key business constaraints in this dstrict. Issues discussed included collaboration between district authorities and private sector, local taxes and parking fees.
Mayors of Gasabo and Kigali city with PSF president among other participants
The issue of tax rates
One of the controversial issues discussed was tax rates as Gasabo is regarded to constitute Kigali city, some business centres, given their geographical locations are not as active in business thus do not fetch as much profit compared to those in the city centres. For instance, rental house in Ndera, Jabana or Nyacyonga is not the same cost as that in Remera or Kimironko yet all are considered in the same tax category (Kigali city).
On average, Majority businesses pay trade licence tax worth 40,000 Frw. Sectors like Jabana, Jari suffered this disparity and majority were forced to move to neighbouring districts like Rulindo where they pay less in taxes.
The law states that “The district council shall determine each year which areas are considered as urban or rural”. However, gasabo district being a part of Kigali city , according to the mayor Steven Rwamulangwa, Gasabo district does not have rural areas but surburbs. This implies that apparently, all areas in Gasabo would fall in the same tax category regardless of location.
According to Mr. Shema Ngoga Fabrice, the PSF president in Gasabo district, the business community is ready to pay taxes. However, there should be consideration in different tax categories because they are not at the same profit levels given sectoral locations and size of business.
Mr. Shema who also sits on the district council in Gasabo requested the district authorities to be flexible enough and work with realities of the business environment to enable more start ups and encourage SMEs in business.
“We are aware about this situation and we want to work closely with PSF to address this issue. Through continued dialogue, we shall jointly come up with mutual solutions to boost private sector development. The resolutions from this dialogue shall be documented and will inform the distric council on the way forward”, said the mayor of Gasabo.
Issue of parking fees
Parking fees were also discussed as a constraint for business operations in Gasabo. Owners of buildings raised a concern of their properties being used for public parking managed by KVCS, yet maintenance of the same is done by the business person on an annual basis.
Pavement costs about 1.5m and may last for less than one year. It is therefore not fair for the business person to renovate such space which is used by another entity such pavements should be renovated by the district or KVCS.
“I have been fined thrice in my own premises! I embraced it at first but with continued fines without clear explanations,” one of the participants complained.
After discussions, resolutions were developed to solve the mentioned issues with a timeline when implementation should be expected in an atmosphere of mutual trust and understanding between public and private representatives.
The dialogue was officially closed by the Mayor of Kigali city, Fidèle Ndayisaba who also appreciated the innovative and proactive way to address issues in a spirit of public-private dialogue. He appreciated involvement of private sector players and encouraged them to keep watch on the upcoming legal reforms regarding local taxes. He also urged them to take advantage of the diverse business opportunities in Gasabo. “Land is the biggest asset owned in Gasabo, this can be maximized in real estate development given the challenge of low cost housing in Kigali city”, Ndayisaba concluded.