President Paul Kagame has urged tax payers to be more compliant, as it is the only way for Rwanda to be economically independent. Kagame was speaking at the 7th Taxpayers’ Day, during which Rwanda Revenue Authority (RRA) also celebrated its 10th anniversary.

During the event, MTN Rwandacell received an award for being the overall best taxpayer, whereas companies such as Bralirwa, BCR and Banque de Kigali were rewarded for their innovativeness, which had significantly improved their business, thus increased their tax contributions.

President Kagame pointed out that through paying taxes, the country would cease to depend on foreign aid. "Why should donors carry our cross? If they do so, they will make us carry a different cross in the form of controlling what we have to do or how you have to leave," Mr. Kagame said.

The President commended the efforts to solve issues between RRA and the taxpayers, which he said would leave both parties happy while the country develops.

He however asked revenue officials to increase the tax payers base, as currently only few taxpayers comply, while the others simply don't pay. President Kagame also asked RRA to set up incentives that would attract investors, saying that in the end both investors and the country gain when the relationship is good.

Yet he remarked that there are rules that govern that relationship, and condemned those who do not play by these rules because they think that they are indispensible, pointing specifically to investors who do not comply with the country's demands in terms of quality, and later claim that Rwanda is not investor-friendly.

Yet the President lauded the partnership between the private sector and the government in terms of investment and profitable businesses. He said that Rwanda has to be competitive and productive on the national level, so that it can be able to contribute on the regional level especially in the East African Community.

Mr. Kagame further advocated a 24-hour border service, pointing out that time differences between countries should not hinder cross-border business. He also asked the business community to take advantage of the security in the country by conducting serious and profitable business, which would help taxpayers to get money to pay taxes. Quality and volume of activity would also increase the number of tax payers, the President said.

Improved infrastructure

Speaking on behalf of tax payers, businessman Faustin Mbundu-who is also the first vice-president of the Private Sector Federation-lauded the Taxpayers' Day as a moment for taxpayers to reflect on the achievements that have been made.

Mr. Mbundu pointed out that if all businesspeople complied on time, it would help Rwanda to be economically independent. He said that the partnership between the private sector and government has been excellent over the years.

He added that the government had removed some of the barriers that hindered taxpayers from complying such as the 6% levy on selling property. He pointed out that increase in taxes paid has led to improved infrastructure in the country.

Faustin Mbundu however highlighted some of the constraints faced by taxpayers, such as the small number of the businesses which are tax compliant, the long queues at revenue paying centers, the long time it takes for declarations and the lack of sufficient RRA centers across the country which would relieve taxpayers from travelling long distances to pay.

The businessman further requested the government to advocate the East African arbitration center to be in Rwanda. He also said that the Private Sector Federation had acquired land on the Kigali-Bugesera road to develop an international trade fair park and asked the government for support in the construction of the park.

"It would ensure that our vision of having Rwanda as a redistribution hub of the region is achieved," Mr. Mbundu said.

Surpassing targets

Mary Baine, the RRA commissioner general, highlighted some of the measures taken to harmonize the collection of taxes. She pointed out that RRA had changed its corporate organization so as to develop a partnership with taxpayers.

Furthermore, RRA has been able to surpass its targets, amongst others through non-fiscal taxes, and it has set up the reformer reward scheme which has worked out well especially in identifying tax evaders. She said that RRA works with security organs to track down tax defaulters.

She also said that the RRA has designed incentives to help investors, such as setting up a tax advisory council and tax clinics where RRA meets with people to explain tax issues. It has further worked with the ministry of education to introduce a tax syllabus in schools.

And the tax agency has indeed made impressive progress since its inception. Back in 1998, it collected Frw 62 billion, which by 2007 had increased to Frw 252 billion. The amount is expected to rise even further in 2008, and already in the first six months it has surpassed its targets.

Ms Baine also urged people to understand the importance of paying taxes, which she said would lead to fulfillment of the government's visions such as the economic development and poverty reduction strategy (EDPRS).

She underlined that that RRA had taken steps to make tax compliancy easier; for instance, in 2002 the Value Added Tax was introduced, and later on both the income tax and customs were revised so as to be more flexible to the tax payers.

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