The opposition Democratic Green Party of Rwanda on Wednesday called for a ‘lasting solution’ after its campaign against hiked property tax bore fruit.
The Finance Minister De Uzziel Ndagijimana announced Tuesday late evening that government had decided to suspend implementation of taxes on land and property which had come into force in 2019.
According to the Ministerial Order at the time, the new rates varied from Rwf 0-300 per sqm. Rates on taxable buildings on the other hand, were categorized based on the market value of the building; that is to say, the 2020 rate for residential buildings is 0.5%, while for commercial buildings is 0.3% and 0.1% for others.
There has been a slight change on the 2020 rates compared to the previous year’s where residential buildings rates were at 0.25%, commercial buildings rates at 0.2%, while others stayed the same.
There was also to be a change on the next two years’ rates, where by in 2021, residential buildings rates will be at 0.75%, commercial buildings at 0.4% and others will stay the same; while in 2022, residential buildings rates will be at 1%, commercial buildings at 0.5% and others will stay the same.
In monetary terms for example, the land tax rose from between Rwf30 – Rwf80 per square metre, to between zero and Rwf300. The law determines the size of a standard plot of 300 square meters, meaning that it is 20 metres in length to 15 metres wide.
The tax was to also actually increase by 50 per cent for each extra square metre to such standard plot.
Among the noisy critics to the taxes from day one has been Dr Frank Habineza, president of the Green Party. He even introduce a rare private members bill in the Lower Chamber of Parliament to remove or cut the land tax.
In media interviews, Habineza has said that his proposal was that if the tax is to be increased, it should at least be put at Rwf100 not Rwf300 as proposed by the Government. He had repeatedly wondered how government can increase taxes in a pandemic.
There has been consistent opposition from the public on the new taxes. Asked about them in December last year, President Paul Kagame said government would look into the public’s concerns.
Reacting to the latest surprising announcement by the Finance Minister, Habineza said: “We appreciate the positive step taken by [Government] by temporarily suspending the implementation of new property tax law. Let’s hope a lasting solution will be found. We will continue to be the voice of the people.”
Since some people had already paid the annual land and property taxes as of February 2021, the finance ministry said the tax body will deduct the extra money paid, and that will be added to the taxes for 2022.
Since the news came through, there has been overwhelming positive reaction from the public on social media and radio talk shows.
For the Green Party, they will see this current development as one of their wins.