Rwanda Revenue Authority (RRA) has said that it surpassed its collection targets in the first semester of 2009 because of high remittances in Pay As You Earn (PAYE), a tax deducted from employees’ salaries and wages plus serious measures to enforce collection.
Mary Baine, RRA’s Commissioner General said, the tax body registered impressive performance in the areas of direct taxes, taxes on goods and services and international trade taxes.
Direct taxes in the period rose by 5.7 percentage points to $119.2m, surpassing the set target of $112.8m. A marginal improvement of 1.6 percent was recorded in taxes on goods and services.
The Commissioner General attributed this to the overall performance of Value Added Tax (VAT) which is said to have surpassed target by 0.1 percent.
She said the marginal increase in VAT collection was a result of the general slowdown the Industry, Service and Imports sectors, attributable to a decreased demand in the economy.
Actual collection for taxes on goods and services was $156.3m as compared to a target of $153.8m.
Taxes on international trade went up by 7.9 percent due to a backlog of goods imported in 2008 and the availability of Wet Cargo (goods such with substantial amounts of liquid, vapour or moisture).
According to RRA, the VAT invoicing campaign that was held in Kigali, targeting small and medium tax-payers played a crucial role in increasing tax collections.
The good performance by the brewery industry as well as improvement in enforcing collection of arrears led to an increase in excise duties.
However, there was a downward turn in the collection of taxes on international trade which was brought about by the decrease in the volume and value of goods originating from non-EAC states that pay at full rate.
Baine also highlighted major achievements in the area of taxpayer appreciation and outreach program.
She said their focus this year was on promoting Small and Medium Enterprises (SMEs) to become more compliant and to develop schemes that propagate their growth.
The revenue authority has been carrying out sensitizations on the importance of certifying business financial statements by recognized and approved tax consultants so as to reduce on accounting errors.
According to RRA, the implementation of a Block Management System (BMS) has facilitated the registration of more taxpayers through education, close monitoring and audit from their proximity.
The body has also launched many trade facilitation initiatives including a post at Nemba at the Rwanda- Burundi boarder post is one and the launching of tax clearance services on line so as to reduce on queues cues at the head office.