8 March 2014

Rwanda: New RRA Boss Seeks to Increase Tax Base

The new Commissioner General of Rwanda Revenue Authority, Richard Tusabe, said his mandate is to attract more businesses into the tax base in order to propel government's goal of self-reliance.

Tusabe, who until recently served as the deputy Commissioner General of RRA, took over from Ben Kagarama, who has headed the institution since 2011.

During the handover ceremony yesterday, Tusabe said RRA's main challenge is to attract all the 120,000 businesses operating in Rwanda into the tax base.

"I will focus on encouraging more taxpayers into compliance. This is the area that remains weak within the institution and my focus will be to improve it," Tusabe said.

"Only 20 per cent of the businesses in Rwanda are registered for tax. Even then, their active ratio is low, at 48 per cent. A lot of work, therefore, needs to be done to encourage businesses to register formerly, as well as follow up to ensure that they are compliant," he added.

Tusabe commended the work of outgoing Commissioner General, Ben Kagarama, and said he will focus on continuity and innovation, to ensure efficiency in tax collection.

"There has been growth in the tax base over the years although many businesses choose to remain in the informal sector. We know that this is because of the cost of tax compliance which most of them prefer to avoid. That is why we introduced innovations like electronic tax payment, which enables someone to pay tax on their phone," Tusabe said.

"Before such innovations, people used to travel from as far as Gahini to Rwamagana, which is almost an hour's drive, to pay taxes. Such inconveniences have been eliminated and we need to encourage even those who do not know about these innovations to come forward."

At the handover ceremony, the Minister for Finance, Claver Gatete, said the tax base is lower than what is required to ensure Rwanda's self-reliance. He pledged to support RRA's new boss in his quest for improvement.

"Even if we had all the 120,000 businesses paying tax, we still believe they are not enough to drive Rwanda's development ambitions. However, RRA has done a great job by combining education, innovation and enforcement to ensure that the tax base grows," Gatete said.

Rwanda ranks number 22 on the paying tax indicator in World Bank's Doing Business Report 2014, having improved by three positions in the previous report.

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