Most parts of Kigali City look deserted following the COVID-19 lockdown. Business activity has plunged as coronavirus is predicted to cause a deep economic recession globally. / Photo: Dan Nsengiyumva.
The Private Sector Federation (PSF) says it is compiling a report on all businesses being affected by coronavirus in an effort to inform policymakers on the appropriate response to soften the impact.
The exercise follows reports that some businesses have started to feel the pinch of COVID-19 with some responding by laying off employees while others have closed shop.
Among the worst hit, so far, is the hotel industry, which has already lost a staggering Rwf13 billion in in potential revenues.
Although the full economic impact of COVID-19 is yet to be established, there’s growing anxiety among business leaders that businesses are likely to struggle to pay bank loans, while the country’s tax base faces daunting challenges.
Barakabuye Nsengiyumva, the Chairperson of Rwanda Hoteliers’ Association (RHA), said that the lack of business activity implies that taxes will be affected
An empty street in ‘Quartier Matheus’ in Kigali Central Business District. The whole country is under partial lockdown since Sunday, March 22. Photo: Dan Nsengiyumva.
Businesses are obliged to declare their taxes including Value Added Tax (VAT), Pay As You Earn (PAYE), Excise Tax as well as pension contribution on the 15th of every month.
However, following the COVID-19 lockdown, this is likely to be impossible in the coming months due to lack of business activity.
Théoneste Ntagengerwa, the PSF Spokesperson told The New Times that the umbrella arm of the business community is compiling information about all the challenges being faced by businesses and that a report will be presented to government to discuss interventions.
“Businesses are counting losses while others such as hotels, events management companies and others have closed. The decision to contain the virus must be supported. However, we are gathering all needed information and we’ll present the report to government so that it takes decision after getting clear status of the issues,” he said.
Government has already started to intervene. It has announced a stimulus package of Rwf50 billion to sustain private sector lending and asked banks to ease their credit conditions in order to support virus-hit businesses.
Members of PSF have teamed up with government to assess the impact of coronavirus on businesses and the economy.
“We hope that from today to another day of declaring taxes, issues revolving around taxes will have been established,” Nsengiyumva said.
The Business Council of the Common Market for Eastern and Southern Africa (COMESA), said in a special report that COVID- 19 virus, has disrupted trade among member states and the bloc’s international trading partners.
This report recommends government and private sector to take immediate, proactive concerted measures to address and mitigate the drastic effects on businesses and the economy at large.
Joseph Ryarasa Nkurunziza, the Chairperson of Rwanda Civil Society Platform, has advocated for tax waivers for businesses that are no longer operating due to COVID-19.