6 October 2017

Rwanda: Small-Scale Cross-Border Traders Call on DRC to Enforce Better Tax Regime

Photo: Faustin Niyigena/New Times
Members of a traders' cooperative of people living with disabilities push a cart of goods from Gisenyi town to cross into Goma in DR Congo.

Small-scale traders along the Rubavu-Goma border have raised concerns over what they perceive as an 'illegal tax' levied on them by DR Congo officials.

Their protest is hinged on an existing bilateral as well as regional trade framework exempting import duty from those dealing in products not exceeding the value of $2,000.

On the Rwandan side at Petite Barrière border post in Rubavu, there is a flurry of activity, with traders crossing into Rwanda while others at exiting to DR Congo.

This was last week when The New Times visited the facility, but traders said that local officials in Goma (in DR Congo) do whatever they want, with some unsure whether the levies they are subjected to are sanctioned by authorities in Kinshasa.

"In Rwanda, we are not required to pay any import tax but back home officials ask for money every now and then," said Buyana Bibishe, a Congolese fishmonger.

"That's how it is there. I can say we are used to it but it is not good."

Her type of merchandise is number 10 on the harmonised common list of products eligible under the COMESA Simplified Trade Regime (SRT) between Rwanda and DR Congo, which was launched in 2016 to allow small-scale traders to import products not exceeding the value of $2,000, duty free.

Olive Mukashyaka, a Rwandan who deals in garments, said that, in Goma, police and other local authorities demand for money as tax and that there is no standard amount.

"Some will ask for 500 francs, others 200 francs, or much more, and so on and so forth. It is the policemen or local officials and many others. We pay and move on but we feel the pinch."

Transporters feel pinch

Albert Ndagijimana, a member of a local traders' cooperative of people living with disabilities (PLWDs), said their hand carts no longer cross into Goma.

"We are feeling the pinch. We can't cross the border because Congolese authorities made things tough for us. All we do is bring the merchandise to the border stores. From here, porters carry it the rest of the journey.

"Before this situation started, in one trip someone would earn $10 for moving a wagon of goods from Rubavu and into Goma but now, because we only come as far as the border, we only earn half the amount or less."

Under the COMESA STR programme, officials drew a list 168 products - agricultural, livestock, fisheries, construction, cosmetics and manufactured products - and agreed that a joint periodic review be conducted every six months to see what products to add or remove.

The signing of the STR followed bilateral meetings organised by COMESA Secretariat in partnership with the African Development Bank and the European Union in July 2015 to agree on a common list of products.

The STR programme aims to simplify clearing procedures and reducing cost of trading by making it possible for the small scale cross-border traders' consignments to benefit from the removal of customs Duty (COMESA Preferential Treatment) if they are on the Common Lists.

As per the agreement, the two countries reportedly agreed on a list of 168 commodities that exonerated from import duties not exceeding $2,000.

Private sector advocacy

Speaking to The New Times, Stephen Ruzibiza, the Private Sector Federation chief executive, acknowledged that there is a bilateral agreement allowing tax exemption for small-scale traders with merchandise not worth more than $2,000.

He said: "On advocacy as noted the issue is not on the Rwandan side but recently, a delegation from the Government of Rwanda and the private sector travelled to DR Congo to address the issue."

Christine Murebwayire, chairperson of the agriculture and livestock chamber at PSF, was part of the delegation that travelled to Goma mid this year on a mission to sort out various trade concerns with their Congolese counterparts.

Murebwayire said: "We are continuing dialogue. Last week, I called the chairperson of a Congolese group called AFECODE [Association des Femmes pour la Conservation et Développment] and we scheduled a meeting for next week. We are discussing how to ease bilateral trade."

Several attempts to get a comment from the DR Congo embassy in Kigali had not yielded by press time.

There is hope

Alphonsine Uwamahoro, a COMESA trade information desk officer based in Rubavu, said there is no difficulty on the Rwandan side because Kigali complied with everything in the bilateral agreement.

For small-scale traders to trade easily, she noted, they just need to fullfill three conditions. They must have products not exceeding the value of $2,000, their merchandise must be on the list of allowed products, and they must have a certificate of origin, an important international trade document certifying that goods are wholly obtained, produced, manufactured or processed in a particular country.

The hitch originating from the DR Congo, Uwamahoro said, is because Kinshasa introduced one extra requirement "obliging small traders to be in associations so as to be officially and easily identified" to curb cheating on the other side of the border. This specific was introduced into the Congolese legal framework "and gazetted" and, as such, must be abided by.

Uwamahoro said: "Their extra requirement is a measure of trying to curb fraud on their side as they have cases of big traders who masquerade as small traders so as to benefit from the STR arrangement."

"Last week, we had meetings with COMESA officials from Rwanda, Uganda and Congo and we discussed issues including this case. But you know, since legal issues are involved here, it becomes a process. A solution might take time."

She said "there is hope" that a way out will be found before long, especially because in DR Congo, the process of identifying genuine small-scale traders was initiated mid this year and is proceeding.

In August last year, President Paul Kagame and his Congolese counterpart Joseph Kabila met in Rubavu and agreed to strengthen cooperation in cross-border trade, among others.

The Rubavu border ranks as one of the most active borders across Africa and Rwanda has erected a new one-stop border post facility in Rubavu to facilitate trade. Construction of the DR Congo section of the facility is on course.

Rwanda's exports to DR Congo the biggest share of the country's informal exports, at more than 70 per cent.

Rwanda

MINALOC Bosses Brief Senators on Housing Plan

The government intends to spend the next seven years building model homes for vulnerable Rwandans as one of the ways to… Read more »

Copyright © 2017 The New Times. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 800 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.