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Kenya Budget Statement Expected This Afternoon

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Over 59 million Kenyans are anxiously waiting to hear the Budget Statement scheduled for presentation at the National Assembly Thursday Afternoon at about 3PM or (2PM CAT).

Treasury Cabinet Secretary Ukur Yatani is currently preparing himself to appear in the National Assembly and make his 2021/2022 budget statement.

According to local Pundits that have over the years monitored the Kenyan economy, this is going to be the first time the budget statement will be presented ahead of the 2021 Economic Survey by the Kenya National Bureau of Statistics (KNBS) which would have traditionally painted a picture of the previous year.

As per procedure, after, reflecting on the state of the Kenyan economy, Yatani will proceed to highlight areas of priority spending in the new financial year which dawns on July 1.

According to insider details, unlike budget days of years past, the 2021 budget statement is all but complete with the exchequer having shares both its final budget estimates and the Finance Bill which carries with it new tax proposals.

An insight into New taxes

In another first in years, the National Treasury has not proposed any new income taxes under the 2021 Finance Bill.

Nevertheless, Kenyans will not be spared from greater taxes as the government strives to meet growing spending plans.

For instance, bread will see its tax status shift from zero rating to exempt effectively raising costs for the basic consumer commodity.

At the same time, the cost of importing motorcycles, popularly termed as bodaboda will shoot up with Treasury proposing the adjustment of excise duty on the imports from a flat Ksh.11, 608.23 to a rate of 15 per cent.

At the same time, jewelry and alternative tobacco products such as nicotine pouches will attract excise duty at the rate of 10 per cent and Ksh.5000 per kilogram respectively.

Punters will also be hit as the 20 per cent excise duty on amounts wagers returns after its temporarily deletion last year.

Besides taxes, other proposals in the Finance Bill seek to empower the Kenya Revenue Authority (KRA) to better collections including a lengthened period to scrutinize tax payer records up to seven years from the current five.

Further, informants on tax matters will see their reward enhanced to a maximum of Ksh.5 million while the KRA will be allowed to contract third parties in the collection of digital services tax.

Both the budget estimates and proposals in the Finance Bill remain under scrutiny by the National Assembly with the house beginning its deliberations on the two key policy statements on Wednesday.

The pair of policies form the basis of the Appropriations Bill and the 2021 Finance Act, both of which will require final assenting by President Uhuru Kenyatta.

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Business

5 Major Structural Reforms At RRA

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Rwanda Revenue Authority (RRA) has been undergoing structural reforms for the past ten years. Key focus on the reforms is digitising service delivery.

Implementation of electronic solutions leveraging on evolving technology has been very critical in ensuring the improvement of taxpayer service delivery and re-engineering RRA’s internal processes in a bid to build a strong revenue administration.

The Commissioner General of RRA, Pascal Bizimana Ruganintwali, spoke to Taarifa about the major reforms since 2010.

1. The electronic single window system in customs has been ranked among the best, worldwide, on matters to do with easy sharing of information among trade regulation stakeholders, faster clearance of traded goods, as well as improved transparency due to limited human interventions.

2. The Electronic Cargo Tracking System has significantly reduced the cost of doing business by eliminating the physical escort of cargo and the cost related to it. The number of days for importation from Mombasa to Kigali has reduced from 21 to 16, to a maximum of five (5) days today. The Electronic Cargo Tracking System has also contributed to efforts of fighting smuggling since it has eliminated the diversion of cargo.

3. The E-Tax system is a solution for electronic filling and electronic payment. Taxpayers can file their tax returns using their home/office computers/laptops regardless of their location. The system also accommodates other useful modules such as Audit and Refund Management, Debt Management that helps the tax administration in enforcement and tax arrears recovery, Motor vehicle management such as motor vehicle registration and ownership transfer, Tax Account and Registration/De-registration of taxpayers. The system has ushered in numerous benefits to the tax administration and to the taxpayers.

4. Electronic Billing Machine: Since the introduction of EBM in 2013, RRA witnessed an increase in VAT collections from Rwf110.5 billion in 2013 to Rwf450.7 billion in 2019 while VAT payables increased by 99.34 %. The system has also increased income tax collection and allowed the setup of controls to validate input and output provided that there was appropriate management of supply chain. Three years ago, RRA introduced the new improved version of the EBM which is more efficient and has eased tracking of transactions on the part of both RRA and taxpayers. The new internet based EBM which aimed at improving compliance and widening the tax base has addressed all the loopholes that existed in the older EBM.

5. Local Government Tax System has improved the management of Local Taxes declaration and payment. The system provide solutions from Registration of taxpayers, Declaration, Audit, enforcement and enables accurate reporting. For accurate and timely reporting on revenue Collection, the Tax Administration introduced SAGE X3.

All these reforms introduced in the last decade, Ruganintwali says, have significantly improved tax compliance, transparency in tax declaration and tax collection since taxpayers can pay precise taxes based on accurate income generated.

Technology in tax collection has ensured certainty in target setting and forecasting since it makes it easier to know what should be happening in the near future.

What are the innovations coming up soon?

He says new operating model currently under implementation intends to become a more data centric tax body that collects as much as possible in terms of revenue and also facilitates taxpayers systematically through electronic systems.

“We are designing new mechanisms leveraging on technology to develop solutions that will ensure high level of compliance among taxpayers through accurate declarations across all tax-heads. Among them, include my RRA project, a solution that will gather all taxpayers’ information in one place. Taxpayers could log into their accounts and have all the information they need to know with less efforts and time. Other projects include the enhancement of electronic Cargo tracking among others.

“Strengthening the institutional capacity (structural review and capacity building of workforce) will remain among our top priorities,” he notes.

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Cimerwa Records Rwf30billion Worth Of Revenue

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Rwanda’s largest cement manufacturer CIMERWA Plc has reported a major growth in its revenue in the first quarter of 2021.

The company said on Friday, it fetched Rwf 30 billion worth of revenue indicating a 14% increase as compared to the same period last year.

According to John Bugunya, the Chief Finance Officer (CFO), the company was able to stage a stronger performance despite the devastating effects of Covid-19 pandemic.

“Our position in the first half of the year paints an encouraging picture of what our financials will look like at the end of 2021. Despite the effects of the lockdown that went into effect during the first quarter of this year, we were able to record strong revenue and profit and maintain a healthy cash balance of Rwf 8.7 billion. This speaks volumes on our resilience in the face of difficulties and challenges,” said Bugunya.

Details also indicate that Cimerwa also recorded a Rwf 1.02 billion decrease in cost of sales which was buoyed by efficiencies in plant operations and prudent cost-saving measures.

Meanwhile, Albert Sigei – Cimerwa Plc CEO said the domestic market continues to show a good growth trajectory driven by infrastructure investments across the country while the export market also grew during the period.

“Amidst this wave of growth, our market position remains strong and steady and we are gearing up to make it even more robust,” he said.

Sigei further noted that the noticeable increase in company inventories is a deliberate and strategic move to ensure that it is ready and able to supply the market with cement while maintaining support for the government’s infrastructure development agenda as a proud ‘made in Rwanda’ company.

As part of measures aimed at preventing further spread of Covid-19, the company has vaccinated about 200 staff and adheres to Standard Operating Procedures.

“Our good results during this period demonstrates Cimerwa’s ability to ride the wave of challenges that were brought on by the COVID-19 pandemic. This however is a collaborative effort that starts from the exceptionally skilled pool of people who work for this company, a competent and devoted board of directors and our supportive stakeholders. All of this puts us in a position to keep delivering on the promise we made to our customers, our shareholders and the country at large,” Sigei said.

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Equity Bank Rwanda Launches Payment Card Usage campaign With Visa

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Equity Bank Rwanda Launches Payment Card usage campaign with Visa. Equity Bank Rwanda has today launched an exciting Visa Card Promotion that seeks to promote usage and payments of goods and services.

The campaign will see customers win exciting prizes ranging from Household Appliances, Brand New Laptops, Supermarket Vouchers, Travel Vouchers, and many more exciting monthly prizes. Launch the new Campaign, Hannington Namara, the Managing Director, said “We are excited to launch this promotion that has been designed to create awareness about the different types of cards as well as the different benefits that customers get when they choose Equity Bank Visa Cards. This promotion will go a step further and reward those who use their cards to make payments both Online and in the Store.”

“Equity Bank offers Different Visa Cards ranging from Debit Cards, Credit Cards and soon introducing Prepaid Cards. This campaign will educate customers about each type of card, the different outlets or locations that accept Equity Visa Cards whether it is online, in the store locally or abroad when they have travelled.” he added.

The key insight behind this campaign is that customers lose a lot of time going to the ATM to withdraw cash only to go into a supermarket, petrol station or pharmacy to pay for goods and services for free.

This campaign will bring to life the customer journey of an Equity Bank Visa Card holder and draw attention to the convenience enjoyed by Equity Card Holders and reward customers every month from June to December 2021. Announcing this campaign, Namara also introduced a first-in-the-market USD- denominated Equity Bank Visa Gold Debit Card.

The Gold-rated card is the first of its kind in the Rwandan market and targets to provide convenience to the bank’s customers, who are looking to make purchases online or trade using the USD currency, Hannington Namara said that the card will enable our customers to do transaction in USD currency for free.

Equity Bank Rwanda currently issues Debit, Credit and will soon issue Prepaid Visa Cards to its customers and they include Equity Bank Visa Infinite Card, a Premium Card that gives cardholders Free Travel Insurance that covers the spouse and children plus Unlimited Access to more than 800 Airport langues around the world.

Equity Bank’s Commercial Direictor, Jean Claude Gaga says that the cards offer an affordable and secure solution to the customer and will go a long way in providing the much-needed convenience and freedom.

“Our promise is to continue to give Rwandans more convenience, comfort, and control of their financial needs, by saving time and costs while carrying out transactions especially as we continue to observe safe health measures against covid-19,” he said.

In light of the Covid-19 pandemic, Gaga took the opportunity to high the fact that all cards issued by Equity are contactless, a feature that shortens the amount of time that a customer spends when making payments in crowded stores such as supermarkets, hotels.

Speaking at the Launch event, Salma Ingabire, Country Director for Visa in Rwanda said, “We are delighted to partner with Equity bank on this timely campaign to enhance the adoption of digital payments as well as inspire and inform merchants and consumers on the benefits and effectiveness of using Visa cards.”

The campaign will run for 12 months, featuring popular brand ambassadors with huge fan bases on Rwanda’s social media platform, Bamenya and Miss Honorine Uwase.

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