Rwanda Revenue Authority (RRA) successfully surpassed its revenue collection target for the fiscal year 2024/2025, Commissioner General, Ronald Niwenshuti announced.
Against a target of Frw3,041.2 billion, provisional figures show that RRA collected Frw3,079.8 billion, reflecting a performance rate of 101.3% and a 16.7% increase compared to the previous year.
CG Niwenshuti said that over the last nine years, RRA has enhanced partnerships with stakeholders to address tax compliance challenges, promote voluntary compliance, and collaboratively determine the necessary actions to ensure adherence to tax obligations.
Key contributors to the 2024/25 revenue collections include the EBM Compliance Campaign implemented in collaboration with Rwanda National Police (RNP) and other stakeholders.
So far, 147,700 EBMs have been distributed, up from 117,631 the previous year. Of these, 44,000 are VAT-registered, from 32,529 previously.
The VAT reward incentive was also introduced to encourage final consumers to request EBM invoices. So far, RRA has paid out over Frw1 billion to 83,356 beneficiaries.
The Voluntary Disclosure Scheme also allowed taxpayers to come forward and disclose unpaid taxes, and they were waived from penalties and interest. This contributed Frw18.1 billion this year, from 5,328 taxpayers who disclosed.
This was complemented by economic growth that averaged 8.0% between July and March, surpassing the projected 7.6% for FY 2024/2025.
RRA conducted 1,430 anti-smuggling operations, recovering Frw14.6 billion in taxes. Improved enforcement of tax arrears also led to the recovery of Frw 278 billion.
“There were also taxpayer engagement sessions. Weconducted 173 sessions with different taxpayer groups, focusing on newly registered taxpayers and high-risk sectors, including manufacturing, construction, importers, and wholesalers,” Niwenshuti added.
Tax Compliance Improvement Plan for the FY 2025/2026
For the new fiscal year 2025/2026, RRA has been assigned an ambitious revenue target of Frw 3,628 billion in tax and non-tax revenues, representing 53% of the national budget of Frw 7,032.5 billion.
To achieve this, RRA has developed the 2025/2026 Tax Compliance Improvement Plan, focusing on improving key aspects of tax administration: registration, filing, payment, and complete and accurate reporting.
For example, RRA has started administering new taxes including a 3% tourism tax targeting accommodation service providers, VAT on transport of goods, IT equipment and fuel, road maintenance levy, tax on hybrid cars, among others.
The recent amendments to tax laws align with Rwanda’s Medium-Term Revenue Strategy (MTRS). These reforms are expected to generate an additional Frw 255.6 billion this fiscal year.
“We are working with all stakeholders to ensure that everyone required to register for these new taxes does so and files accurately. We have conducted workshops and will continue to do so across all sectors affected by the new tax policy measures,” he added.
RRA has also identified specific sectors requiring tailored compliance interventions, both in domestic and customs taxation.
In domestic taxes, RRA will focus on sectors with notable compliance challenges, including manufacturing, construction, professional services, real estate, short-term and other accommodation services, sale and maintenance of motor vehicles and cycles, and non-governmental organizations (NGOs).
In customs taxes, RRA will use a risk-based approach, targeting importers dealing in high-risk commodities, those importing from high-risk origins, and brokers identified through selectivity criteria with the highest hit rates.
Approach
To leverage strong collaboration with stakeholders and lessons learned, RRA has developed a number of strategic interventions aimed at enhancing voluntary compliance.
These include engaging taxpayers in high-risk sectors to discuss issues affecting their compliance behavior; continuing to use modern risk management tools and data analytics to detect non-compliance; strengthening media outreach to educate taxpayers on services, obligations, and risks; and organizing tax education seminars and advisory visits.
RRA also aims to identify and register unregistered taxpayers; conduct audits and reinforce the recovery of tax arrears; expand EBM usage and VAT reward benefits; and continue to enhance its systems while introducing new technologies in Customs and Domestic Tax Department to deter smuggling and tax avoidance.
CG Niwenshuti emphasized RRA dedication to improving compliance and called on the media collaboration to eradicate practices that obstruct this goal, such as smuggling, fraud, and tax evasion.
These tax-related offenses are akin to other criminal activities, as they weaken our economy and negatively affect domestic resource mobilization.