The African Tax Administration Forum (ATAF) has placed Rwanda at the forefront among countries that put effective COVID-19 tax relief measures in Africa, followed by Lesotho, Uganda, Burkina Faso, Niger, Madagascar, South Africa, Togo, Cameroon, Gambia, Sierra Leone, Zambia, Mauritius, Seychelles, Tanzania, Zimbabwe, Eswatini, Ghana, Angola, Burundi and Namibia.
On March 21, 2020, Rwanda took a strong decision to enforce a total lockdown across the country to curtail the spread of COVID-19, a week after the first case of the epidemic was registered in the country.
Social and economic activities were halted, except for the essential supply activities including health and food related; with a range of social distancing and hygiene measures were set up, such as hand-washing equipment at agricultural collection centers.
During the lockdown, all non-essential labor and business activities, mostly urban in nature, were stopped, bringing severe effects on the country’s economy, just like any other country around the globe.
This called for collective efforts from both public and private agencies to support the Government in the struggle by putting respective and strong measures to curb the spread while also supporting business continuity.
It is in this line that Rwanda Revenue Authority introduced various Covid-19 relief measures to facilitate the taxpayers in their business continuity and recovery.
Among others include halting all tax audits that required physical interactions with taxpayers for a period of one month, putting on hold the two major enforcement steps for tax arrears (garnishment and public auction) for all taxpayers for a period of one month, putting in place facilitation processes to expedite the issuance of refunds particularly for hardest affected taxpayers by the covid-19 pandemic.
The Authority also extended the certification of financial tax statements for a period of 3 months, Payments of CIT 2019/2020 expected on 31st March were deferred to 15th April 2020 and 30th April 2020 for Large Taxpayers and S&M Taxpayers respectively.
Taxpayers also benefited from the extension of tax payment periods, exemption of PAYE for the 6 months for private school teachers earning up to Rwf 150,000 net and 3 months for employees of companies operating in the tourism and hotel sector earning up to Rwf 150,000.
There was also an exemption of VAT and Import Duty for essential supplies, waiver of penalties, fines and interests, suspension of the 25% down payment admissible for amicable settlement.
The RRA also supported businesses to access the business recovery fund that was availed by the National Bank to help taxpayers that were affected by COVID-19 by expediting issuance of Tax Clearance Certificates (prerequisite).
The Authority while introduced measures aimed at protecting society by enforcing non-physical cargo inspection procedures at the customs and allocating cargo crew members designated facilities to rest as they await the finalization of the offloading process hence minimize their interaction with the rest of the society to avoid the spread of the pandemic.
With effect from April 24, 2020, all customs services which were initially offered in Kigali and other inland customs offices, were also extended to customs border posts.
These among other measures have facilitated taxpayers in their business resumption and recovery, hence being compliant to their tax obligations notwithstanding the effects of the pandemic.
For this reason, tax revenue collection for the first quarter of 2020/21 amounted to Rwf 371.5 billion above the target of Rwf 351.2 billion. This indicates an achievement of 105.8% and Rwf 20.3 billion above the target. On the other hand, Local Government (LG) taxes and fees collections for the same quarter amounted to Rwf 11.3 billion over and above the target of Rwf 10.6 billion.
This indicates an achievement of 106.6%, and the RRA anticipates more significant achievements.
Represented by RRA, Rwanda is one of the 39 members of Africa Tax Administration Forum (ATAF), an organization that was established by African revenue authorities in 2009, in order to improve the performance of tax administrations in Africa.