The Government collected less revenues than expected in the first quarter of this fiscal year, Uzziel Ndagijimana, the Minister for Finance and Economic Planning, said on Monday as he updated parliamentarians on the state of the economy and the budget. 

Ndagijimana told lawmakers that from the July to September 2021 period, the government collected Rwf611.7 billion in tax and nontax revenues, which was Rwf2.2 billion less the target of Rwf613.9 billion.

He explained that the drop was due to the third wave of the Covid-19 pandemic, which prompted a two-week lockdown in the City of Kigali and other parts of the country.

In addition to the lockdown, the drop in revenues was also caused by government’s incentives as it exempted some manufacturing firms from paying taxes as part of its relief measures to help businesses deal with the pandemic. 

In his presentation, which provided a breakdown of public finances, Ndagijimana said that in the period under review the government collected Rwf400.3 billion in taxes instead of the targeted Rwf410.9 billion. 

Taxes on property were Rwf1 billion against a projection of Rwf4.4 billion, while taxes while tax revenues from goods and services were Rwf188.9 billion compared to a target of Rwf198.9 billion. 

However, the government met its target on tax collections on income, profits and capital gains where it collected Rwf180.5 billion compared to a target of Rwf173.8 billion 

On the basis of taxes on international trade and transactions, the government generated Rwf29.9 billion instead of Rwf38.8 billion, while other revenues collected Rwf83 billion.

The minister also said that the government received Rwf128.4 billion in grants, which is more than the Rwf120.8 billion that was initially projected.

Now the government plans to invest in new projects through the Economic Recovery Fund (ERF) as it seeks to add impetus in its efforts to lift the economy out of the 2020 recession—the first since 1994.