The three districts that form the City of Kigali Council owe the city authority billions of francs in unremitted tax collections.
According Jacques Masenga, the head of the revenue collection unit at city council, Gasabo, Kicukiro and Nyarugenge districts are yet to remit Rwf1,252,068,180 tax collections for the 2011/12 fiscal year.
He said Kicukiro owes over Rwf274.5m arrears, Nyerugenge Rwf646,230,457 and Gasobo district Rwf331,354,770.
“This has delayed implementation of projects both at the city council and the district level,” he noted.
When a lower authority delays to remit revenue collections, it is fined a 1.5 per cent interest on the money.
Masenga, however, said that despite the delay, revenue collections have increased by 16% across all sectors. The council collected Rwf15b last financial year, with this fiscal year collections projected at over Rwf17b.
Masenga also said the revenue department faces challenges as far as tax collection was concerned.
“The department lacks a computerised system with new technologies to help record and track tax defaulters,” he said.
He noted that the city authority’s main source of revenue is property rent, land leases, rental income tax and trading licenses and parking fees.
Meanwhile, Kicukiro projects to collect Rwf196,967,172 from fixed assets alone, Rwf1.5b from land lease, Rwf603,925,915 as rental income tax and Rwf398,255,525 from trading licenses. Nyarugenge, on the other hand, is projected to collect Rwf546.7m as property tax, Rwf559,602,407 from land lease, Rwf1.4b as rental income tax and Rwf644.2m as trading licence tax. Gasobo district is also projected to collect Rfw1.4b as rental tax, Rwf1.7b from land lease and Rwf610,140,473 property tax this year.
Of all the revenue collected, 30 per cent of the revenue goes to coffers of the City of Kigali (CoK), 45 per cent taken back to the district services and 25 per cent invested in selected sectors.
Recently, COK started a five-year work plan, which will see the construction of 30km asphalt roads, 100km of stone paved roads and the upgrading of Nyabugogo intercity terminal.