The Ministry of Finance and economic Planning (MINECOFIN) says collecting local government taxes through Rwanda Revenue Authority (RRA) will improve service delivery albeit some challenges that should be addressed.
The Minister, Amb. Claver Gatete highlighted the benefits yesterday as he met the parliamentary commission in charge of budget and economic performance to discuss the revised 2015/2016 budget.
Members of Parliament had earlier on sighted challenges encountered in the process of collecting taxes at various levels yet they are a great source of the country’s revenues.
Gatete informed the committee that on several occasions, people were forced to pay local government taxes instead of inviting them into compliance and therefore evasion was rampant. RRA, he said, was brought into the equation given its experience in tax education and collection to improve performance and using modern technologies.
The officer in charge of fiscal decentralization, Jonathan Nzayikorera, said that the pessimism that targets would not be achieved is being challenged since there’s proper planning.
In the last calendar year 2015, all districts put together earned Rwf 18 million from taxes, a 2% increase from the previous year.
The reforms introduced in the recent past to increase tax base include; tax education, use of modern technologies, e-taxation and regular audits.
“If we employed tax collectors in districts it would require Rwf 8 billion for salaries. Paying this amount as salary from gathered Rwf 17 billion is not doable,” said Nzayikorera.
He said that there are talks between banks to seek how they can waive off fees charged to taxpayers that do not have bank accounts.
MPs observed that there are times when the Electronic Billing Machines fail to get connected thus affecting business performance and tax collection.
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