Rwanda Revenue Authority (RRA) collected 93 per cent of the agency’s revenue projection for the just-concluded 2019/20 fiscal year.
The agency managed to collect Rwf1,461.3bn from a target of Rwf1,568.5bn, according to RRA Commissioner General Pascal Bizimana Ruganintwali.
While the collections were lower than projected, owing to the Covid-19 pandemic, there was a growth of Rwf62.3b in comparison to the previous year 2018/19.
The pandemic and measures to curb it saw a halt of business operations in Kigali since mid-March, consequently costing the revenue authorities billions in taxes.
In the current 2020/21 fiscal year, the agency has projections of collecting Rwf1,421.40 billion, a 10 per cent drop from the just-concluded fiscal year’s projections.
This is the first time since 1998 that the government is projecting a decline in tax revenue.
Bizimana noted that going forward, compliance improvement plans are key in enabling the body to raise revenue targets.
By improving compliance, in the just-concluded fiscal year, he noted that tax revenue increased in almost all targeted sectors and in almost all tax heads, increased taxpayers’ and late filing of tax returns has decreased.
In the current fiscal year, the body will seek to enhance compliance improvement plans in key areas such as the financial services sector, mainly insurance companies, microfinance institutions and forex bureaus as well as suppliers of hotels, bars and restaurants.
The compliance improvement plan also targets importers and clearing agents.
In this fiscal year, the agency will also focus on remedial actions for the findings of the research recently conducted on taxpayers’ behavior to improve voluntary compliance.
For instance, the body will encourage the Private Sector Federation (PSF) and Rwanda Freight Forwarders Association to coordinate meetings and workshops with high-risk importers and customs brokers.
The tax body will also continue to use modern risk management tools to identify tax compliance risks, extend EBM Project to all taxpayers and ensure its appropriate use as well as strengthen media programs to communicate services available.
In response to the pandemic’s economic effects, RRA has introduced policy measures and consideration to reduce economic effects such as introducing computation of the quarterly payment for corporate income taxes and personal income tax (PIT) based on the transaction of the current year.
Pay As You Earn has also been waived for a period of six months (from April-September 2020) for teachers of private schools earning up to Rwf150,000 net salary.
The adjustments will also see all transportation motor vehicles conducting business pay their quarterly fixed personal income tax for this year proportional to the period of operations.Follow https://twitter.com/ByCollinsMwai