RRA short of Rwf56b to meet target
Rwanda Revenue Authority (RRA) is confident as it races against time to raise Rwf56.5 billion by the end of June in order to meet its target for the financial year 2011/2012.
Early last year, the tax authority announced a target of Rwf515 billion for the 2011/2012 fiscal year, although documents The New Times has seen indicate that the figure was later slightly upped to Rwf519.7 billion.
Total tax revenue excluding the month of June is Rwf463 billion, mainly driven by taxes on goods and services as well as direct tax on income and profits.
“Our initial total target for the ten months between July 2011 and April 2012 was Rwf427 billion, but we surpassed it by Rwf35.5 billion. This is a strong performance which makes us certain that we are on the road to surpassing the financial year target,” Agnes Kanyangeyo, the Director of Planning and Research at RRA, said in an interview.
“This reflects the continuous economic growth of Rwanda, whereby, more businesses were profitable and declared more tax. It is also an indication that our sensitisation programmes worked well, as we provided ample information that enabled many more taxable bases, that failed to declare tax due to lack of information to declare (their taxes) on time.”
The tax authority, however, is still held back by poor declarations from the Small and Medium Enterprises (SME) sector.
Despite being the leading employer in the country, the SME sector remains largely untapped. Out of a projected Rwf20.1 billion for the period of July 2011 to April 2012, tax revenues of Rwf19 billion were collected from small enterprises.
“SMEs are difficult to analyse and monitor although they are a large taxable group. We still find it hard to reach all of them because they keep changing locations or the type of business. So at the moment, it is as if we are at their mercy and that is why they under declare tax whereas some do not declare at all,” Kanyageyo said.
“RRA has, however, set up mechanisms, including a workforce team and sensitisation campaigns to educate the public about the importance of paying taxes as a means of contributing to the country’s development.”
Beer, wines and liquors are so far leading the other goods and sevices contributing Rwf27.3 in excise tax, exceeding the target by Rwf1.2 billion.
Excise taxes on cigarettes amounted to Rwf3.2 billion whereas vehicle registration fetched Rwf1.9 billion.
Government’s decision to rollback petrol and diesel taxes earlier in January affected RRA’s projections. Out of the targeted Rwf31 billion tax, the tax authority was able to garther Rwf30 billion.
Contact email: ivan.mugisha[at]newtimes.co.rw