Africa-Press – Rwanda. It has been five years since Rwanda announced its intention to introduce a Startup Act as part of broader efforts to transform the country’s technology and innovation landscape.
However, as time passes without the law being enacted, startup founders and ecosystem players say the delay is not just a bureaucratic setback, but a missed opportunity to access incentives that could boost job creation, attract investment, and fuel economic growth.
Startup Acts are legal frameworks designed to support and incentivise players within the startup ecosystem.
Rwanda’s proposed Startup Act was expected to provide critical support mechanisms aimed at easing the growth trajectory for startups. Its delay, therefore, continues to frustrate entrepreneurs hoping to benefit from these long-awaited reforms.
Among the proposed incentives included tax breaks such as zero-rated PAYE on salaries up to Rwf1 million, five-year exemptions on VAT and Corporate Income Tax, 100 per cent accelerated depreciation, and various financial support measures.
Alex Ntale, the CEO of the Rwanda ICT Chamber and a key player in the Rwandan ICT sector, stated that he is unaware of what still lags behind the Startup Act and why it hasn’t been tabled in Cabinet yet. He recalls valid meetings with relevant ministries, but a key challenge has been aligning the incentives involved.
“Some of the proposed incentives are fiscal in nature, such as tax exemptions or dedicated funding which require commitment from the government. But under existing legal frameworks, a law cannot directly commit government funds or guarantees,” he observed.
He believes that is likely the remaining biggest hurdle.
“There are multiple drafts and a number of validations still underway. However, some aspects have already begun to take shape; some have even passed through the cabinet,” Ntale adds.
One example is the Public Procurement for Innovation policy, which seeks to create opportunities for startups by enabling them to collaborate with, or be contracted by, the public sector.
However, Ntale highlighted that the Public Procurement for Innovation policy does not replace the Startup Act. “It’s a complementary measure that opens a door but the broader legal framework to support startups holistically still remains pending.”
The Ministry of ICT and Innovation was spearheading the development of the Startup Act. However, efforts to get an update from ministry officials were all futile.
Startups push for incentives
Cedrick Mupenzi, the founder of Sinc Today, an app for event discovery, believes that the Startup Act could serve as a critical safety net for entrepreneurs ready to take the leap from stable employment into uncertain ventures.
“It’s never easy to quit a job and start a business from scratch, especially when you’re still in the pre-revenue stage. Many people hesitate because they’re leaving behind a steady income for something that may not pay off right away. That’s how a lot of promising ideas and solutions die before they even begin,” he said.
If implemented, Mupenzi believes the Startup Act could really empower young people to take that step and keep building solutions that matter to their communities.
“One of the biggest challenges we face is taxation, particularly PAYE, which is very high,” he noted, citing that her experience. “In my tech startup, I work with engineers whose salaries are already high. To reduce the tax burden, we’re often forced to hire them as consultants rather than full-time employees, which isn’t always sustainable.”
The entrepreneur indicated that beyond taxes, support for intellectual property is something that could benefit startups. “Startups working on innovative solutions need IP certificates or licenses, and having that support would help protect and commercialize their work.”
Nobert Haguma, Founder and CEO of Swapinga, a mobility and financial firm, emphasised the importance of addressing access to finance and regulatory compliance in supporting start-ups.
According to him, these are the main challenges faced by emerging businesses.
Haguma argued that waiving taxes for early-stage start-ups, especially those generating little or no revenue, is a positive step. However, he stressed that beyond tax relief, simplifying and centralising compliance processes is critical.
He recommended a one-stop platform for registering and managing all legal and tax obligations to reduce the bureaucratic burden on entrepreneurs.
“With the majority of Rwandan businesses being small, these should be prioritised under the Start-up Act,” he said. “If the Act aims to foster innovation, then simplifying compliance and reducing early tax burdens are essential.”
Haguma further suggested that the government should enable start-ups with confirmed contracts, particularly those with government entities or large institutions, to use these agreements as collateral to access funding.
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