Rwanda’s tax revenue collection grew from Rwf68 billion in 1998 to more than Rwf2.6 trillion over the past quarter-century, implying an increase of more than 38 times, or 3,850 per cent, according to Rwanda Revenue Authority.

The baseline figure was recorded just a year after the formation of Rwanda Revenue Authority, the country's tax collection body.

RRA Commissioner General Niwenshuti Ronald announced the figures on July 3, in Kigali, at a news conference in which the tax authority presented preliminary results of revenue performance for 2023/2024 and launch of tax compliance improvement plan for 2024/2025.

He said that the tax collection of last year reflects the progress made within 30 years of the liberation of Rwanda.

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According to RRA, tax revenue collection in 2023/24 was slightly over Rwf2,619 billion compared to a target of Rwf2,637 billion, which represents an achievement of 99.3 per cent.

As such, RRA financed the national budget by 51.2 per cent in fiscal year 2023-2024, from 48.9 per cent in the previous year, 2022-2023.

"The revenue collected represents an increase of 12.3 per cent when we compare the concluded fiscal year [2023/2024] and the previous year of 2022/2023,” Niwenshuti said, indicating that the final figures will be communicated in due course after reconciliation.

On what such money was used for, he mentioned hospitals, schools, and the security that Rwandans enjoy.

On the tax-to-GDP ratio, he pointed out that it was at 15.1 per cent in 2023/2024, informing that the tax administration body projects to raise that rate to 15.8 per cent in the 2024/2025 fiscal year which commenced in July.

"For this new fiscal year 2024/2025, our revenue target is set at an ambitious sum of Rwf3,061.2 billion which is 54 per cent of the national budget of Rwf5,690.1 billion and we are very optimistic that we shall achieve it,” said Niwenshuti.

Drivers for 2023/2024 tax collection performance

Niwenshuti attributed the performance to a number of factors, observing that major contributors include the number of taxpayers that were registered under the electronic billing machines (EBMs) category.

The number of taxpayers registered on EBM increased from 84,448 in 2022/23 to 117,631 in 2023/2024, which translates into an increment of 28 per cent, he said.

Among them, he indicated, 32,529 taxpayers are value-added tax (VAT) registered taxpayers, meaning that they were contributing to the VAT collections.

Another factor that has supported the development is VAT reward scheme – whereby a final consumer who requests an invoice generated by an electronic invoicing system – such as EBMs – for his/her purchase(s) and then presents it to the tax administration [which is currently RRA gets a 10 per cent share of the VAT levied as his or her award.

To date, since the scheme started in March 2024, RRA registered 23,675 beneficiaries (consumers) with a total reward of Rwf244 million owed to them by RRA).

Also, he said, the government implemented a voluntary disclosure programme where taxpayers were given an incentive to disclose any outstanding tax of before 2022 whereby they get a penalty waiver upon paying the overdue amount.

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RRA indicated that 1,783 taxpayers registered under the programme and disclosed Rwf14.3 billion of which Rwf6.6 billion has been paid).

Economic growth of 9.1 per cent for the Jul-March period compared to 7.4 per cent projected for 2023/24, and automation of key services that simplified communication and service delivery, were also among drivers of tax collection growth, it showed.