As part of Made in Rwanda and exports promotion, the government has waived taxes on importation of machinery, textile and leather products raw materials from 10-25% to zero tariff.
{{What they say}}
Monica Usaniwabo, the head of Unity Designers, a company that makes clothes, bags and other fashion handicrafts welcomed the budget saying that it incentivises manufacturers.
Usaniwabo’s company imports raw materials to make handicraft. She said waiving off taxes on raw materials will help them increase volume and quality for local and export markets.
“With the tax incentive, we shall produce high value products for both local and international markets,” she says.
For Olivier Benimana, Ben’s Jewellery and Clothing Ltd head, a jewellery, clothing and shoes making company, reduced cost of production will be a big boost to local production. “Importing raw materials and paying import duties would raise cost of the final product which forced price skyrocketing, so clients would prefer buying imported cheaper to the local one,” he said adding that the development comes to solve one of the challenges that have been haunting manufacturers.
Teddy Kaberuka, a local Economic Analyst welcomed the budget saying that it is in line with promoting locally manufactured products.
“As the economic cluster has taken 57% of the budget, it is clear that the government target is to advance economic development. This sector earns the country resources to run other projects,” he says.
{{Background}}
The Minister of Finance and Economic Planning, Dr. Uzziel Ndagijimana on Thursday read the 2018/2019 budget where the economic cluster covered 57% of the total budget and waived taxes on textile, leather imported raw materials.
Ndagijimana said that the government will develop industries and exportation where they have allocated there a total of Rwf253.5 billion.
He said that among priority activities in this sector include construction of industrial zones across the country, construction of four ports on the shores of Lake Kivu, continue with construction works of first phase of Bugesera International Airport, expansion of RwandAir activities, promotion of tourism with focus on hosting international conferences, raising coffee earnings to USD75 million per year, tea export earnings to USD82 million annually and flower exports by 34%.
Through the harmonization of custom revenues on imported commodities with neighboring countries, Ndagijimana said that the move will help the government to promote Made in Rwanda.
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