The Director for Tax Payer Services has revealed that the Rwanda Revenue Authority [RRA] has lost over Rwf1 billion due to tax evasion.
Speaking at a tax sensitisation workshop at Alpha Palace in Remera this week, Gerald Nkusi, explained that of the 3,300 registered tax payers, about 1700 evade taxes. He cited ignorance among some people as one of the causes of tax evasion.
“Some of them don’t know the importance of paying taxes while others intentionally avoid paying,” he said.
He, however, pointed out that unlike before in 1998 when it had just started, the RRA has improved revenue collection. He said that RRA embarked on mass sensitisation and capacity building of district finance officers in order to increase efficiency in revenue collection.
According to Nkusi, 50 percent of government’s budget is financed by domestic revenue. A booklet issued by RRA detailing statistics of annual revenue collections since 1995 shows a tremendous increase of the tax base to meet the growing government expenditure.
In 1995, government budget was Rwf 61.5 bn but increased to Rwf 527.9 bn in 2007.
The same statistics show that revenue collection also increased from Rwf 10.3bn in 1995 to Rwf250 b in 2007.
George Byamukama, the head of the Decentralisation Support Unit in RRA, citing annual reports from government ministries of Local government, Finance and RRA, said that loopholes that have led to continued revenue losses had been unveiled in the local government’s tax collection systems.
“During the survey, we found out that 40 percent of expected revenue is not collected in some of the districts. In the Eastern Province, some districts have not registered their number of tax payers,” he said.
In 2006, the Ministry of Local Government carried out management reforms and decentralised power, giving districts powers to collect taxes.
Byamukama said that the survey also revealed that there was false declaration of assets by tax payers especially in the urban areas of Gasabo, Kicukiro, and Nyarugenge Districts. He also said that some tax payers relocate their businesses in an attempt to evade taxes.
“Some move to other places and, or change the address with the intention of evading taxes,” he said.
Andrew Bayingana from the Ministry of Local Government, said that tax collectors at district level are also faced with challenges that are hindrances to the efficient execution of their work.
“There are usually two or three tax collectors,” he said, adding that other challenges include poor facilitation, limited staff capacities, false declaration and legal challenges.
The workshop, attended by members of the civil society, was part of a series of sensitisation campaigns aimed at creating awareness on the significance of revenue collection.