BUJUMBURA (Reuters) - Burundi plans to introduce a new value-added tax (VAT) to boost business and attract foreign investors, a government official said on Friday.
The new 18 percent VAT system is due to take effect by July 2009, when the landlocked Burundi and neighbour Rwanda are expected to join the East African Community (EAC) trade bloc.
The EAC already has a customs union for three of its largest economies Kenya, Uganda and Tanzania.
The VAT system will replace a 17 percent transaction tax (TT) which the authorities say was hampering investment.
"The VAT is going to promote business and attract foreign capital," said Aloys Ntakirutimana, the head of taxation in Burundi's finance ministry.
"For instance, investors who came in the country to install a factory used to pay a transaction tax on equipment -… with VAT, the equipment will enter into the country free of charge," he said.
The coffee growing central African nation has fixed the value-added tax at 18 percent, which is the same VAT rate applied by Rwanda and Uganda.
"We want to harmonise our fiscal systems with those of other members of the East African Community," Ntakirutimana told reporters after a two-day training workshop on the VAT system.
Ntakirutimana said the VAT will also help regulate informal trade, and ensure taxes from the sector end up in the treasury.
2 comments:
For the sake of Burundians...Tax is important,
Well done !!!
I think so, taxes are the main revenue for everynation...On our case though, we still need an agency that oversees taxes so that it is more or less independant and focussed not on politics, but on economics...Great first step!
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