Although Albert Einstein once said that the hardest thing in the world to understand is income tax, he clearly never interacted with Rwanda Revenue Authority (RRA), which has done remarkably well over the years in making it easy for the customers to understand the system.
I further believe that the complex can even be made clearer through the setting up of a tax institute under the leadership of RRA. This could be viewed as a major step to raise professional capabilities and expertise in our tax community. It will also facilitate Rwanda’s growing role as a knowledge hub in tax policy and tax administration.
To serve as a knowledge hub in this field, we need highly skilled tax professionals, top quality research and the presence of international tax institutions. It means enlarging our pool of tax professionals and helping them acquire the complex expertise that is required to function effectively, not only in the Rwandan environment but in fast changing international markets.
The changing ecosystem in which professionals work has been molded by several mega trends and emerging issues in the past few years.
First, increased connectivity of markets around the world has facilitated globalisation, which in turn, has made individuals, corporations and nations more competitive internationally. There is increased movement of individuals, goods and services and even corporations.
Suitably-qualified individuals are now truly mobile. Businesses can source competitively-priced supplies and sell them to the most lucrative markets regardless of location. Corporations can locate themselves in any parts of the world that can best cater to their needs- be it proximity to their customers, suppliers or to be in a jurisdiction that accords them the best financial incentives and a stable pro-business environment.
In this regard, the tax professional has a vital role to play in helping to bridge the different needs across tax jurisdictions. Be it the high net-worth individual seeking financial planning advice, businesses seeking advice on transfer pricing or companies seeking advice on their tax obligations, there are many opportunities for the tax professional to venture into.
Second, the advent of technology has opened up new dimensions for economic growth. It has spawned new products and services, opened up more channels of development, production, and different marketing and distribution methods.
This rapid pace of change requires the tax professional to not only keep abreast with changes, but also to constantly look beyond his or her horizon. A wide base of knowledge in tax law and practice, coupled with a continuing professional development regime, will enable and equip the tax professional to be better prepared for future challenges.
Third, rapid advancement in technology and increased globalisation also brings about increased complexities in doing business. With new products, services and methods of production and delivery, business advisors, accountants and other professional service providers will now have multi-lateral issues to consider.
For instance, how can an author of an eBook protect his intellectual property and how much tax does he need to pay on the royalties he earns from all over the world? Or how does he ensure that his publisher pays him the agreed-upon royalties? As the issues become more complex, there will be increased demand for the expertise of the tax professional.
With more cross-border businesses transactions comes an increasingly complex tax environment, and this is where the demand for tax professionals in niche areas are called for. Multinational corporations, for example, place a higher value on an accountant with professional expertise and knowledge of the tax regimes in the countries it operates in.
The African continent, in particular, will see a huge demand for professional accountancy services and talents, with the market for accountancy services forecasted to reach US$25 billion by 2020.
We can capitalise on the growth on the continent to build Rwanda into a global accounting hub, particularly in the tax sector. There is great potential for us to be a leading regional tax hub and a centre of excellence in tax education. One key area to explore is to develop deeper professional expertise in tax advisory work, to service the increasing cross-border investments and transactions on the African continent.
As companies start to ride the wave of recovery in the global economy and adapt to global mega trends, Rwanda must continue to invest in the quality of our workforce and position ourselves as the business and knowledge hub for the region.
Continuous learning and attaining a certain level of proficiency in their field will help tax professionals reap productivity gains in their professional work. Assuring professional standards locally through accreditation, and equipping our professionals with skills for international tax work, are imperatives in a globalised tax environment.
With this initiative- the Rwanda Tax Institute- tax practice and compliance standards will be raised even higher.