(DTIS) Update, Volume 1 – Main report - Enhanced Integrated ...

According to a testimony gathered in the course of the mission, claiming the first of these criteria is achallenge because it is based on an addendum to the EAC CU rules of origin that administrationssometimes do not seem to possess or know of. As for the second rule, a company’s administrativeoverheads are typically not counted as domestic value added, yielding a very restrictive estimate of valueadded.Certificates of origin must be obtained from the Ministry of Commerce (they used to be issued by theChamber of Commerce), and Rwanda’s authorities assess the authenticity of those certificates bychecking a list of authorized signatures communicated by Burundi’s authorities. When personnel at theMinistry of Commerce changes, Rwanda’s authorities may (they do) challenge the validity of thesignature and embark in a process of inter-ministerial verification whose time schedule is very differentfrom the schedule of business transactions. One interviewee mentioned a “circus” that lasted four monthsand came to an end only with the intervention of a high-level political official.3. Streamlining NTMs in Burundi: An agenda for action4.1 Key challengesThe priorities emerging from the analysis so far are clear. Right now, an important subject of frictionbetween national authorities and the private sector lies in the forceful deployment of a new VAT-basedfiscal system and the formalization of transactions that it entails. This is in spite of the fact that theformal sector welcomes OBR’s efforts to level the playing field by attempting to close loopholes ofvarious sorts.NTMs stricto sensu are not perceived as a major problem, especially by established operators. However,the rapid evolution of the regulatory environment at home and abroad can quickly change that, andraises, in particular, two potential issues:- Regulatory proliferation, combined with weak capabilities and a legacy of discretionary andopaque enforcement, with the effect of stifling entry and diversification of the economy;- Rising NTBs in at least some neighboring countries, highlighting weak EAC disciplines and alack of appropriate diplomatic reaction by partners.Dealing with these current and emerging challenges requires effort along three axes: 911. Work toward a climate of trust and mutual respect between public administrations and theprivate sector, by: Maintaining the momentum of efforts to close loopholes and to put the most egregious formsof rent-seeking to an end; Clarifying rules through the posting of all relevant texts on accessible and well-organizedweb sites; Training administrative personnel so that interpretations, information and enforcementcriteria do not vary; Dropping procedures launched on the basis of offenses allegedly committed years before theOBR’s creation; Furthering efforts to facilitate small-scale trade by building on initiatives such as the régimede commerce simplifié (RCS) adopted through cooperation between Burundi’s OBR and theRwanda Revenue Authority. Broadening the RCS approach could lead to a small-traderscharter designed to facilitate small-scale trade without encouraging the slicing up of large-91 These recommendations build on and are complementary to those of Kirk (2010).85 / 153