The new General Commissioner of Rwanda Revenue Authority (RRA) Richard Tusaba has said Rwanda needs increased tax base in order to attain the country’s development goals.
He made the remarks during the handover ceremony at the Ministry of Finance and Economic Planning in Kigali on March 10, 2014.
Tusabe assumed office with a pledge to expand the tax base in a bid to facilitate government’s goal of self-reliance.
Currently there are only 120,000 registered taxpaying business entities representing 20% of businesses in Rwanda. Even then, their active ratio is low, at 48%.
Tusabe, who until recently served as the deputy Commissioner General of RRA, took over from Ben Kagarama, who has headed the institution since 2011.
Tusabe singled out expansion of tax base as RRA’s main challenge.
“My focus will be to encourage businesses to register formerly but also ensure more taxpayers into compliance. This is the area that remains weak within the institution and my focus will be to improve it,” Tusabe said.
The Minister of Finance and Economic Planning Claver Gatete observed that the only way to achieve the self-reliance objective was through increasing the tax base.
Currently taxes account for 14% ratio of GDP. “This is simply not enough. We have to set our sights above 20%,” Minister Gatete said.
“Even if we had all the 120,000 registered businesses paying tax, we still believe they are not enough to drive Rwanda’s development ambitions,” He added.
The Minister however lauded RRA tax reforms put in place that combines education, innovations and enforcement to increase tax base and compliance.
The outgoing Commissioner General, Ben Kagarama was acknowledged for steering the Revenue body through several reforms of which the new Commissioner General looks to build upon.
Rwanda ranks number 22 on the paying tax indicator in World Bank’s Doing Business Report 2014, having improved by three positions in the previous report.