The 2021/22 budget worth an estimated Rwf3.8 trillion, is expected to be 67 per cent domestically funded, an equivalent of Rwf2.5 trillion.
Of these, Rwanda Revenue Authority (RRA) has a target to raise a sum of Rwf1,774.1 billion which is 46 per cent of the national budget.
In the previous financial year, the agency went above the Rwf1,579.7 billion target to collect Rwf1,643.3 billion.
The raised target is amidst an economic slowdown resulting from the pandemic as well as the fact that a section of businesses such as tourism, travel are not likely to contribute as much due to reduced operations.
According to the RRA Commissioner General, Pascal Bizimana Ruganintwali, the agency is banking on compliance improvement in the financial year to raise collections.
"The implementation of the previous Compliance Improvement Plan and the achievement of the revenue targets were made possible by government’s efforts to boost country’s economic recovery,” he said.
This is in addition to RRA administrative efforts instigated to contain the pace of revenue collection including the increased usage of technology and Automation of most of our processes, data matching to identify actual risks and facilitated importers with cash-flow difficulties to clear their goods with instalment payment plans, he added.
He said that among aspects that they will seek to improve compliance include: registration on appropriate taxes; adoption and usage of EBM for all businesses; filing and payment on time as well as complete and accurate reporting.
Ruganintwali noted that there will also be specific compliance interventions on select sectors especially those found to have challenges including construction sector, information and communication sector, importers as well as clearing agents.
Among the activities on the agency’s to-do list include; engaging with taxpayers in high-risk sectors to discuss issues affecting their compliance; rollout of modern risk management tools and data analytics to identify tax compliance risks as well as extending EBM usage to all taxpayers.
The agency also plans on awareness campaigns through media, education seminars and advisory visit as well as registration of potential unregistered taxpayers.
Commenting recently on the new budget at a roundtable, Angelo Musinguzi, a tax expert at KPMG Rwanda said that while the new budget has a higher expenditure, it does not have new taxes and is likely to be buoyed by compliance measures of the current taxpayer base.
In April this year, in a bid to strengthen its monitoring capacity to boost revenue collection, RRA received equipment worth $760,000 (approximately Rwf750 million) from the Japanese government to support border surveillance.
The agency has also announced new solutions that will allow taxpayers to access Electronic Invoicing Systems (EIS) — commonly known as EBMs — through mobile phones increasing accessibility, convenience and accuracy of the EBM services.