How government will finance the 2018/19 Budget

Tusabe speaks during a past event. Sam Ngendahimana.

Finance Minister Uzzeil Ndagijimana yesterday unveiled the 2018/19 budget valued at Rwf2.4 trillion.

It will be financed through domestic resources, loans and grants. According to the Ministry of Finance, domestic resources will contribute 67 per cent, while loans will contribute 16 per cent and grants 16 per cent.


Ndagijima noted that the target for domestic resources is at Rwf 1,645.1 billion, which represents an increment of Rwf 232.3 billion. Tax revenues are projected to hit Rwf 1,351.7 billion up from Rwf 1,200.3 billion.


Ndagijimana said that there are various ways of raising tax revenues among them increasing tax compliance, efficiency and effectiveness.


“The tax reforms include review of Procedural law which will broaden the use of Electronic Billing Machines (EBMs) which has brought in some good results. Now that we are introducing the second generation of EBMS, we intend to ensure that they are used by all business operators,” the Minister said.

This new policy framework, Ndagijimana says, will facilitate the tax collectors to trace the transactions and know exactly what the tax base is.

“Income tax law has also been revised and also there is an ongoing revision on Property Tax law which will expand the tax base to include other taxes on land and houses,” Ndagijimana noted.

Minister Ndagijimana’s comments were echoed by Richard Tusabe the Commissioner General for Rwanda Revenue Authority (RRA).

“One way (to increase domestic revenues) is to leverage on the projected GDP growth and also bridging the gap we have on tax efficiency. In terms of EBMs, we are going to broaden the tax base by having people using EBM, even the non-VAT registered.

“If the Procedural law—whose draft is being examined in Parliament—is passed, possibly in the next two months and the revised Excise Tax law which will increase taxes on alcohol and tobacco among other products, again this is another area that we look at in terms of increasing revenue,” he added.

Tusabe said that the Procedural law will give the Finance Minister the mandate to decide on who should be using EBMs.

 “Another key component in the Procedural bill is to soften penalties for those who didn’t intend to default taxes. We need to make sure that the penalties are geared towards improving compliance other than driving people out of business.

The new policy changes are geared towards improving the business environment in general, plus efficiency and effectiveness in tax collection,” he added.


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