How Rwanda aim to increase tax by Rwf3 trillion in the 2024/25 fiscal year

The government aims to accelerate the execution of important projects in sectors like health, education, disaster management, social protection, governance, justice, and reconciliation. Tax revenues are expected to contribute over Rwf2.97 trillion, which makes up 52% of the total budget for 2024/2025, as per the finance law. 

The tax revenue for the 2023/2024 fiscal year ended on June 30 is more than Rwf333 billion, surpassing the target by 12 per cent. The total revenue collected amounts to Rwf2.63 trillion. These revenues are expected to come from four main areas. 

The largest contribution, more than Rwf1.4 trillion, is projected to come from taxes on income, profits, or capital gains. Following this, taxes on goods and services are expected to generate Rwf1.3 trillion.

Taxes on international trade and transactions are expected to generate over Rwf209 billion, while property taxes will bring in more than Rwf7 billion, according to the Rwanda Revenue Authority (RRA). As part of its action plan for 2024/25, the RRA aims to maximize revenue collection, among other objectives.

The plan outlines several initiatives to be undertaken. These include broadening the tax base by enhancing taxpayer registration processes, maintaining an accurate taxpayer registry, and reviewing tax laws for adequacy and relevance. Another key initiative involves sustaining tax compliance through improving mechanisms to boost taxpayer compliance, automating filing processes, and enforcing the use of electronic payment methods for large and medium taxpayers.

Total domestic resources

Domestic resources, including over Rwf2.97 trillion in taxes, are expected to exceed Rwf3.64 trillion, representing about 64% of the total budget. Other revenues, apart from taxes, are expected to contribute over Rwf444 billion.

This includes income from the sale of goods and services, which is anticipated to be more than Rwf382 billion, property income of more than Rwf24.5 billion, fines, penalties, and forfeits that are expected to generate over Rwf36.6 billion, and domestic loans likely to amount to Rwf232 billion.

External resources are projected to contribute slightly over Rwf2 trillion, including grants totalling more than Rwf725 billion and foreign loans of Rwf1.3 trillion.