The government collected Rwf871.4 billion in both tax and non-tax revenues during the Financial Year 2014/15, according to Rwanda Revenue Authority (RRA).
This represents a 12.6 per cent increase compared to the previous financial year, when Rwf782.5 billon was collected.
The figures were announced, yesterday, by RRA Commissioner-General Richard Tusabe during a news conference at the revenue body’s headquarters in Kimihurura in Kigali.
According to Tusabe, Rwf858.4 billion was collected in tax revenue against a target of Rwf878 billion for last financial year, reflecting an achievement of almost 97.8 per cent.
Equally, RRA managed to collect Rwf13 billion from non tax revenues against a target of Rwf10.2 billion, registering a surplus of Rwf2.8 billion (27.5 per cent) over the target.
“Decentralised taxes (trade licence, property tax and rental income tax) collection for 2014/15 was Rwf13.2 billion against a target of Rwf13.5 billion when you exclude fees. This means that total revenue collections grew by 12.6 per cent,” Tusabe said.
What this growth means
According to Damien Ndizeye, a private economist and consultant based in Kigali, the growth means the country is moving towards self-reliance.
The government has said it expects domestic resources to finance up to 66 per cent of its Rwf1768.2 trillion National Budget for 2015/2016 financial year using domestic resources.
This means that Rwf1,174.2 billion must be sourced domestically, which puts more pressure on RRA to mobilise and collect this revenue.
Factors behind improved performance
Tusabe attributed the improved performance to good collaboration with various stakeholders, including Rwanda Cooperatives Agency, the Private Sector Federation and Rwanda Governance Board.
These, he said, played a big role in ensuring registration of quarries, maize milling business operators, commercial buildings and landlords within the City of Kigali for VAT.
Enforcement of the use of electronic billing machines (EBM) was yet another notable factor in the improved revenue collections, said Tusabe.
“We conducted regular checks to ensure that taxpayers were using EBM properly and filed their taxes. We also conducted more targeted campaigns about the new system,” he said.
So far, a total of 8,000 VAT-registered taxpayers use EBMs out of 12,000 in the country.
The revenue body is counting on this technology, among other strategies, to be able to meet its targets this fiscal year, Drocelle Mukashyaka, the deputy commissioner for taxpayer services, told The New Times.
Meanwhile, RRA cited the low inflation (1.3 per cent) during 2014/2015, the fall of global oil prices and reduced consumption of excisable products as some of the reasons they slightly missed the overall target.
As the revenue body sets its eyes at collecting resources that will help finance the National Budget by 66 per cent, the authority is still faced with resistance by some taxpayers to use EBMs as required by law, which, according to Tusabe, is affecting VAT collection.
RRA also decried non compliant taxpayers who they declare/file tax returns, but refuse to remit the due taxes, until they are forced.
“Some businesses also still undervalue their goods during import clearance process, which, in turn, impacts on the revenue collection,” Tusabe added.
Key priorities for FY 2015/16
According to RRA, the tax revenue target for the Financial Year 2015/16 is Rwf972.27 billion, which includes tax revenue equivalent to Rwf949.19 billion and the local government tax of Rwf23.08 billion.
In addition, the non-tax revenue target for the fiscal year 2015/16 is Rwf45.4 billion composed of RRA non-tax revenue of Rwf13.0 billion and local government fees totalling to Rwf32.4 billion.
To achieve these targets, RRA is planning to continue taxpayer registration process, enhance EBM monitoring systems and continue enforcing the payment of tax arrears among many other measures.