Tax administrators from 49 countries of the Commonwealth countries are in the country for one week to discuss how tax administration in all its aspects can be promoted especially in the developing economies like Rwanda.
The meeting, which opened last evening in Kigali is an opportunity for the tax bodies to share their experiences, challenges and work out solutions to the challenges hindering tax systems within Commonwealth countries.
RRA Commissioner General Ben Kagarama said the conference presented an opportunity for members to bring on board new innovative ideas that will positively impact on Rwanda’s taxation policy.
The challenge of helping SMEs through taxation policies is very paramount because they are the backbone of African economies, he said.
The Minister of Finance and Economic Planning, Claver Gatete,said Rwanda has benefited a lot from this association since 2011 in terms of capacity building, tax compliance and public accountability.
This has provided government revenues which is a key element of strengthening national financial reforms in ensuring equity distribution of resources, he said.
According to Drocelle Mukashyaka, the deputy Commissioner for tax payer services at RRA, experts will focus on strategies on how to tax the untapped resources especially those surrounding Small Medium Enterprises (SMEs) without affecting their economic progress.
“The current issues revolving on how high net worth individuals can be taxed will also be on the agenda,” Mukashyaka said.
She further noted that the conference is a great opportunity to learn about tax administration.
“We are positioning ourselves to benefit from this great opportunity, it’s an opportunity for us as an economy which has just launched EDPRS2 with an objective of achieving an 11.5 per cent growth to share those good experiences from our counterparts.”
The World Bank Doing Business report 2013, ranked Rwanda 25th out of 185 countries surveyed globally on tax compliance, topping the East African region.
The report noted that Rwanda is the easiest country to pay taxes in the region with just 17 payments annually followed by Burundi, 25, with Uganda businesses having to make 31 payments, Kenya 41 and Tanzania makes it harder for taxpayers with 48 payments. Rwandans pay nine different taxes, but pay VAT and social security contributions quarterly, resulting in fewer annual filings and payments for business compared to its regional peers.
Complying with taxes takes only 134 hours a year in Rwanda, while it takes 340 in Kenya.
The need for capacity building in the areas of professional, technical and management skills, training, computerisation, collection and enforcement procedures is imperative, according Angello Musinguzi Tax services Manger at KPMG.
RRA rolled out electronic platforms last year to facilitate taxpayers to declare returns as well as pay taxes through the Internet to boost fiscal revenues and curb rampant tax fraud. However, their use has been singled out as a challenge to SMEs, which are more familiar with paperwork such as handwritten invoices.