11 May 2014

Rwanda: Nation Races for Revenue Targets

Kigali — The Rwanda Revenue Authority (RRA) is finding ways improving efficiencies in revenue collection so that it reach its fiscal year target.

RRA collected Rwf 554.3 billion (about $800 million) in the first nine months of the current fiscal year (July 2013 to March 2014), a 14.5% increase compared to the Rwf 484.1 billion collected in the same period in the last fiscal year.

Giving his latest report last week, Richard Tusabe, the RRA Commissioner General said currently they were a 95.3% achievement rate of the Rwf 581.5 billion ($840 million) target.

He said much still needed to be done in order for them to reach this fiscal year's target of Rwf 782.5 billion especially in the use of electronic billing machines.

"We have put in place a team of 50 people travelling countrywide to sensitize traders who haven't yet started using the machines and other 200 staff members as back office monitoring team to monitor how those who have the machines use them," he said.

Tusabe said, "Currently, 4,500 traders out of the 7,500 Value Added Tax (VAT) registered payers are using the machines while around 1,900 are not using them, the rest are exempted from using them since they use mobile declaration."

He said RRA will continue to undertake various initiatives aimed at improving service delivery, including expanding usage of electronic services for filing and payment of taxes, implementing the electronic single window system and gold card scheme at customs, increasing collection of non-tax revenues using electronic payment methods, following up the construction of One-Stop-Border Posts and fully implementing the Single Customs Territory across the northern and central corridors.

RRA collections form a large chunk of Rwanda's annual budget as it strives to depend less on donors and become self-reliant.

According to Tusabe, the suspension in donor aid last year directly affected the demand of goods and services in the country which led to lower taxes being collected against the set target.

Rwanda's Gross Domestic Product shrank to 4.6 per cent last year from an average of eight per cent in 2012 as government reduced spending thus affecting private sector growth.

In spite of that, Rwanda remains the most tax compliant country in East Africa according to the 2014 World Bank Doing Business Report.

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