I went to the Rwanda Revenue Authority (RRA) to sort out Taarifa’s tax obligations and obtain documents needed to participate in government tenders.
For the days I frequented their officers, I expected paperwork and difficult procedures. Instead, I came away with a very different view of RRA, its staff, its systems and some of the challenges that taxpayers face.
Over the past week, I dealt with executives, division managers and officers at different levels. I found them professional, friendly and willing to help taxpayers understand and follow the law.
The leadership, including the Commissioner General I spoke to last week, and his deputies, is also very approachable and engaged.
Of course they cannot make tax obligations disappear or offer illegal shortcuts, but they help taxpayers understand their position and find lawful ways forward.
I also saw how hard RRA staff work. Some work well beyond official hours, late into the night and sometimes into the early hours of the morning.
This is an institution handling a huge volume of work, including revenue collected for government and other public institutions.
At its core, its job is not simply to collect more money from existing taxpayers, but to mobilise resources for the country and widen the tax base by bringing more economic activity into the formal system.
At the same time, much of the pressure comes from taxpayers themselves. Many businesses do not fully understand their tax obligations or the procedures they must follow.
Some become non-compliant because of ignorance or difficult business circumstances, while others deliberately evade taxes or try to manipulate the system. RRA has to deal with all of them.
What struck me most was the sophistication of the system. Much of RRA’s work is automated, with controls, approvals and audit trails designed to protect public revenue and make fraud or corruption difficult. That is important and RRA deserves credit.
However, the taxpayer still encounters a lot of paperwork, printing, forms, multiple approvals and movement from one officer or division to another. When systems or processes are under pressure, delays can become costly for businesses.
The answer is not to remove controls. It is to make them smarter and easier to navigate. RRA could establish a sophisticated central call centre, combining automation with trained tax specialists. An internal network Communication system, desk telephone sets, video calls and chat boxes could reduce movement and paperwork and increase productivity and efficiency.
A taxpayer should be able to explain a problem once, receive a case reference, understand exactly what is required, track progress and reach the right division without repeatedly moving from one office to another.
Notably, public education is equally important. I know RRA already conducts taxpayer awareness and education, but it is not enough for the size and complexity of the tax system.
Clearly RRA needs a massive and continuous public campaign explaining taxes, deadlines, filing procedures, penalties and taxpayer rights in simple language. The more taxpayers understand before they get into trouble, the less pressure there will be on RRA and the fewer avoidable compliance problems will arise.
There is also an opportunity here for the private sector. Rwanda needs more professional accounting and tax advisory businesses that can help small and medium enterprises maintain proper books, file correctly, understand their obligations and deal with RRA before problems become serious.
Entrepreneurs should see this not only as a professional service, but as a growing business opportunity created by the country’s expanding formal economy and increasingly sophisticated tax system.
Then comes the harder question: the law itself. Tax enforcement must be firm. People and businesses that deliberately evade taxes should face serious consequences. But the law should also recognise the difference between deliberate evasion and a business that has simply gone bad.
Take a small enterprise with a principal tax debt of Rwf80 million. After interest and penalties accumulate, that debt can potentially become Rwf200 million. If the business is financially bleeding but can demonstrate that it has the ability to pay the Rwf80 million principal, yet has no realistic way of raising the additional Rwf120 million, what happens?
The danger is that the business becomes trapped. It can pay what it actually owes, but cannot escape the accumulated penalties and interest. If there is no workable legal solution, the business may eventually have to close. That means lost jobs, lost economic activity and, ultimately, a taxpayer who disappears from the tax base altogether.
That is where I believe the law needs to give RRA more options. Where a taxpayer can demonstrate genuine financial distress and a credible ability to settle the principal, there should be lawful and carefully controlled ways to restructure or manage accumulated penalties and interest.
This should not become a loophole for tax evaders, but a recovery mechanism for businesses that can still survive and return to compliance.
The objective should be to collect what is owed, not to bury a small business under a debt it has no realistic ability to pay.
My experience has given me much greater respect for RRA. It is a sophisticated and heavily burdened institution, and the people working there are doing far more than most taxpayers realise.
A reform should be undertaken to make compliance easier through better taxpayer assistance, much larger public education, stronger private-sector support, simpler procedures and a legal framework that is firm on evasion but gives genuinely struggling businesses a reasonable path back to compliance.
