The Rwanda Government has come up with several mitigation measures to help businesses overcome the impact of the New Coronavirus, including a business support fund that will be availed later in May.
The Ministry of Trade and Industry on Wednesday announced key immediate and short term measures to be taken to support businesses to remain operational despite being hit hard by the COVID-19 outbreak.
The Government said the pandemic has had unprecedented impact on both national and global economies as countries continue to grapple with growing infections and deaths as partial or full lockdowns cripple economies.
Rwanda was among the first countries to take a quick decision to impose a full lockdown to minimize the spread of the virus, something experts say helped keep the numbers low, the country so far having registered 153 cases and no fatalities.
“The next few months will be challenging, requiring the combined efforts of the Private Sector and Government of Rwanda to adapt to, and weather the changes to come,”
“To this end, Government of Rwanda put mitigating economic and social measures in place, geared towards cushioning the pandemic’s impact,” the Ministry said.
MINICOM said it continues to work closely with the Private Sector Federation (PSF) to enable the trade and manufacturing sectors to overcome the challenges of COVID-19.
Among the key immediate and short term measures adopted to support the business community and minimize declining cash flows include easing loan restructuring conditions to allow businesses to remain operational and maintain staff.
“Flexibility in loan restructuring and deferred payments by commercial banks as guided by the National Bank of Rwanda (BNR)” is one of the measures, while Rwanda Revenue Authority (RRA), with the help of the Ministry of Finance and Economic Planning, was requested to immediately make VAT refunds to SMEs to allow them breathing space in the intervention period.
The government also announced an extension of the deadline to file and pay Corporate Income Tax (CIT) and flexibility by RRA to enhance business liquidity.
Under this measure, large businesses will get a two-weeks extension while small and medium businesses will get a one month extension. Among the medium and long term measures, the government said a support fund to cater for long term recovery of businesses is being discussed and its modalities, details will be issued in May.
In line with the directives, RRA said it had already announced extensions for taxpayers beginning on April 1, where large taxpayers had up to April 15 to make declarations while small and medium taxpayers have up to April 30 to declare income tax. The deadline for other taxes is April 24.
The taxman is expected to disburse over Rwf13bn in VAT refunds as part of the measures to cushion businesses from the cash crunch.
The Chie Executive Officer (CEO) of the Private Sector Federation (PSF) Stephen Ruzibiza told KT Press that they are working closely with government to come up with more measures to mitigate the impact of COVID-19.
He said a study is being done to ascertain the losses each sector has incurred so far, with the tourism sector alone counting estimated losses of at least Rwf35bn.
He said the announced measures which were arrived at in consultation with the Private Sector are timely and will go a long way in helping businesses to remain sustainable.
Experts however how predicted that the COVID-19 pandemic could stay a little longer than expected, the worst case scenario being 2021 if governments around the world don’t work effectively to rein in the virus and at the same time.
Ruzibiza said that in case the pandemic persists, the private sector will go back to the drawing board with the government to come up with measures to mitigate the impact further.
“That is the next phase- we’re working in collaboration with Government- the team is looking at all scenarios that will be used should the situation persist beyond the current timeframe,” Ruzibiza said.
Rwanda has set April 30 as the last day of the current lockdown extension. The country has so far registered 153 cases with 3 new cases announced on Wednesday.