KIGALI - Rwanda Revenue Authority will soon take the responsibility of collecting contributions made by employees towards their social security fund and health insurance.
The Minister for Finance, John Rwangombwa explained that his Ministry was authorizing Rwanda Revenue Authority to collect contributions on behalf of the Social Security Fund of Rwanda (SSFR) and RAMA.
The Finance Ministry regulates both institutions. “This measure will reduce the burden of compliance for taxpayers as they will queue only once to fulfill their various obligations,” he said
Rwangombwa said that the move will also help RRA to broaden its tax base by bringing into the tax net potential taxpayers who make their social security and health insurance contributions but do not pay their taxes.
The current system provides for a payment of 8 percent contributions into SSFR, 5 percent deducted from the employer and 3 percent from the employee for the provision of retirement and occupational risks and as much as 15 percent into RAMA for medical care.
The Acting Director General of SSFR, Africa Ramba, told The New Times yesterday that one of the reasons behind the decision was to make service delivery easier for the tax payer.
Asked about the timeline, Ramba was non committal saying that the discussions to begin the project were still ongoing.
“It is still something in the pipeline. It probably has to go the Cabinet and obviously some laws governing how each institution collects contributions are going to be changed before we proceed,” he said
A source within SSFR who declined to be named explained that the decision was also taken because of the RRA database and network.
“RRA has a wide network and information on every employee. Tasking it with collecting the contributions will also help put a stop to employees, especially in the informal sector, who usually dodge paying their contributions,” he said
The source says that what remains for the deal to be sealed is RRA’s decision on payment and the legal framework.
“We are waiting for RRA to decide on how they will be compensated for their services, because they are not SSFR employees, and there has to be a legal framework in place before the deal is sealed” he said
The Social Security Fund of Rwanda (SSFR) last year spent Rwf6.3bn on 31,000 pensioners.