The Rwanda Revenue Authority (RRA) is grappling with the recovery of accrued tax arrears that the report of the Auditor General for the fiscal year 2019-2020 which ended on June 2020, said more than doubled over the last five years.

This is one of the issues that was on the agenda of the Public Accounts Committee (PAC) hearings on Friday, September 10, 2021 when officials from RRA were responding to public asset management problems identified in the report.

It noted a low rate of tax arrears recovery. The report indicated that the accumulated tax arrears increased from over Rwf147.2 billion in 2015 to Rwf353.1 billion by June 2020.

This problem, it said, is mainly attributed to lack of effective recovery controls.

MP Jeanne d’Arc Uwimanimpaye said that the arrears are huge, calling for strategies for the effective recovery.

Another MP, Beline Uwineza, alluded to the Parliament’s resolution that requested RRA to recover, in one year, arrears that amounted to over Rwf270 billion in the fiscal year 2018/2019, or indicate which arrears were not coverable and why.

She wanted to know the progress in this regard so far.

Hajara Batamuliza, Commissioner for Domestic Taxes at RRA said that Rwf134 billion of such tax debts were owed by Government entities, she said, adding that they were facing issues such as budget constraints.  

Rwf141 billion tax arrears were owed by the mining sector "that we are still trying to recover.”

"There is Rwf24 billion owed by small taxpayers, including people who open business and after realising that they have arrears yet they do not have assets, close them,” she said, adding that, there are also cases of deaths which complicate the task.

Meanwhile, she said that the revenue body has recovered Rwf60 billion of the outstanding taxes as of June 30, 2020.

She said that they are within the range of 10 percent and 20 percent of the recoverable [tax] debts per year, which she noted is meeting the international tax administration standards.

In line with efforts to tackle the issue, she said that [tax] enforcement unity will be further resourced, and the revision of internal processes and procedures in order to achieve efficiency.