East African Community (EAC) economies are becoming increasingly service-driven and digital, a transformation that is reshaping how governments should collect and manage tax revenues, according to Rwanda’s State Minister for National Treasury Godfrey Kabera.
He made the remarks while speaking at the opening of the 53rd East African Revenue Authorities Commissioners General (EARACGs) Meeting in Kigali on November 13.
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"The region is becoming more service-driven and digital, with growth in sectors such as telecommunications, finance, e-commerce, and professional services reshaping the revenue landscape,” he said.
"This presents opportunities to capture revenue from new economic activities, but also challenges in ensuring compliance in increasingly complex and intangible transactions,” he added.
He also pointed out that industrial activity and trade also continue to be important drivers of growth, with customs remaining a significant revenue source. However, as regional integration deepens, he noted that the relative contribution of customs is set to decline, placing greater weight on domestic taxes to sustain revenue growth.
Kabera observed that these developments "reflect a stronger, more self-reliant fiscal foundation, and an evolving, modern economy.”
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"For tax practitioners, this means designing policies that can harness the growth of digital and service sectors, modernise trade-related taxation, and ensure that revenue collection keeps pace with the changing economy – all while maintaining fairness, efficiency, and fiscal sustainability.”
In May 2025, Rwanda enacted an income tax law that introduced taxation of digital services – at 1.5 per cent rate of the gross revenues sourced from Rwanda by a company supplying digital services, during the tax period. – as a means to tap the growing industry.
Progress in macroeconomic stability
Kabera also highlighted progress in macroeconomic stability, noting that "the region’s average inflation fell to 4.4 per cent in 2024/25, a significant reduction from 12.1 per cent just two years ago, providing a solid foundation for sustainable economic growth.”
The tax-to-budget ratio also showed improvement, rising to 62.6 per cent in 2023/24 from 56 per cent the year before, "a 7.2-percentage-point increase in just one fiscal year,” Kabera said.
"This demonstrates that more of our national budgets are being financed internally, reducing reliance on external borrowing and strengthening fiscal resilience.”
He concluded that the region’s progress shows "East African countries increasingly possess the resources to pursue strategic investment and tax policy choices, rather than reacting to fiscal pressures,” underscoring that the EAC’s digital and service-driven transformation is opening a new era for smarter, fairer, and more sustainable revenue systems.