Leveraging digital technologies to boost tax collection, combat tax fraud and evasion, and enhance international cooperation to address cross border tax challenges is critical in an evolving tax landscape. These were sentiments from tax experts, policymakers and scholars gathered in Kigali for a conference on the future of tax administration in the digital age. The two-day conference, hosted by the Rwanda Revenue Authority (RRA) and the International Centre for Tax and Development (ICTD), concluded in Kigali this week under the theme 'Towards a digital tax administration: lessons learned and directions for reform.' RRA Commissioner General, Ronald Niwenshuti, said that digital transformation in tax administration is inevitable. As the global landscape evolves, so must the systems, strategies and policies, ensuring they remain inclusive, efficient and resilient, since digital transformation is the cornerstone of modern tax administration, Niwenshuti said. ALSO READ: RRA cracks whip on businesses snubbing electronic invoicing system The Commissioner General also noted that digital tools are not only enablers, but have also proven to be catalysts for trust-building, improved service delivery as well as sustainable revenue growth. Rwanda is already leveraging technology to modernise its tax administration, improving efficiency and effectiveness. In 2011, the country launched the electronic tax system, transforming tax filing and payments processes by reducing errors and lessening administrative burdens. In 2013, the introduction of the Electronic Billing Machines (EBMs) enhanced Value Added Tax (VAT) compliance and helped in curbing evasion and was later upgraded to offer real-time data capture and enhance fraud prevention. ALSO READ: FEATURED - RRA launches nationwide campaign to promote EBM usage The reforms, according to the taxman, have yielded an increase in VAT and income tax collections and enhanced compliance. Domestic revenue now funds over 54 per cent of the national budget, aligning with national strategies including Vision 2050 and the National Strategy for Transformation, Niwenshuti said. According to Antoine Sebera, Government Chief Innovation Officer at the Rwanda Information Society Authority (RISA), achieving a robust digital tax administration is possible, but the journey is not without challenges. Data availability and data quality is a big challenge. Organisations struggle with fragmented and incomplete data, making it difficult to track and access digital transactions accurately, he said, adding that data interoperability and establishing secure data sharing mechanisms are critical steps that must be prioritised to overcome this challenge. Sebera also emphasised the need for capacity building to enable the proper use of Artificial Intelligence tools in tax administration. Some administrations still lack infrastructure and technical expertise needed to deploy advanced tools for monitoring, analysing and enforcing tax compliance in the context of a digital economy, he said, adding that building capacity in data analytics, artificial intelligence (AI) and cybersecurity is essential to overcome these obstacles. According to experts, AI has the potential to revolutionise digital tax administration and governance by improving the efficiency and effectiveness of tax systems. In advanced markets, AI tools are being used to help identify patterns of tax evasion, optimise resource allocation and provide real time support to taxpayers. However, according to Sebera, governments need to ensure that the use of AI is within the confines of legal and ethical guidelines. Ethical and regulatory concerns, such as data privacy, algorithmic biases and accountability, cannot be overlooked. Governments must develop robust legal frameworks and ethical guidelines to govern the use of AI in public administration, he said. Experts at the conference also discussed emerging practices such as digital public infrastructure (DPI), which is increasingly becoming a promising framework to streamline tax processes and promote inclusivity.
