The Rwanda Revenue Authority (RRA) has unveiled an ambitious Compliance Improvement Plan (CIP) for the 2026/2027 financial year, setting a target of collecting Frw 4.64 trillion in central government revenue and Frw 165.9 billion for local governments, together accounting for 61.6% of Rwanda’s Frw 7.8 trillion national budget.

The new strategy builds on what RRA described as one of its strongest performances in recent years. During the 2025/2026 fiscal year, the tax authority collected Frw 3.956 trillion, surpassing its target by 4.2% and registering a 27.7% increase compared to the previous financial year.

Local government revenue also exceeded expectations, reaching Frw 137.9 billion, equivalent to 102.3% of its target before reconciliation.

RRA Commissioner General Ronald Niwenshuti attributed the performance to strong economic growth, improved tax administration, successful tax policy reforms and higher levels of voluntary taxpayer compliance.

Among the biggest contributors to the improved revenue performance was an 11% real GDP growth during the first three quarters of the fiscal year, significantly above the projected 8.1%.

Business turnover rose by 23.7%, while the share of VAT-able sales increased from 52.3% to 59.2%, expanding the country’s VAT base.

Taxable imports also climbed 29.6%, boosting customs revenue, while taxable corporate income increased by 22.9% and employment income rose by 14.6%.

The tax authority also expanded its taxpayer base by registering 126,282 new taxpayers, who generated Frw 15.4 billion in tax revenue.

It recovered Frw 277.1 billion in domestic tax arrears, completed 1,883 tax audits that yielded Frw 9.3 billion in additional tax assessments, and introduced tax policy measures that generated Frw 286.7 billion, exceeding the target by 10.6%.

RRA said digital compliance initiatives continued to produce results. More than 43,000 additional businesses adopted Electronic Billing Machines (EBMs), while participation in the Tengamara na TVA and Tenga Promo VAT reward schemes grew from 74,964 participants to more than 1.09 million within a year. Consumers requested invoices reflecting Frw 105.8 billion in VAT output, and Frw 4.2 billion in VAT rewards was paid out.

Enforcement efforts also intensified. RRA completed 163 tax investigation cases resulting in Frw 21.4 billion in tax assessments and carried out 1,542 anti-smuggling operations that generated Frw 29 billion in additional assessments. Joint campaigns with the Rwanda National Police led to more than 12,000 taxpayers adopting EBMs and recovered Frw 3 billion in penalties. Data analytics also prevented fraudulent VAT refund claims worth Frw 28 billion through the detection of fictitious invoices.

Looking ahead, the 2026/2027 Compliance Improvement Plan will focus on strengthening taxpayer registration, timely filing and payment, accurate tax reporting, wider adoption of EBMs, digital transformation and risk-based compliance management. Priority sectors include manufacturing, transport and storage, information and communication, professional services, education, real estate and construction.

Commissioner General Ronald Niwenshuti said continued collaboration between taxpayers, stakeholders and RRA staff would be essential to achieving higher levels of voluntary compliance and meeting the country’s growing domestic revenue needs.