Rwanda Revenue Authority on strengthening domestic revenue mobilisation

Rwanda's tax administration reforms, particularly the implementation of Electronic Billing Machines (EBM) and digital tax systems, have had a significant impact on the country's revenue collection efforts. CNBC Africa's Flora Lemoke spoke to Ronald Nguyen-Shuti, Commissioner General of the Rwanda Revenue Authority, at the African Tax Administration Forum (ATAF) in Kigali to discuss the country's efforts in strengthening domestic revenue mobilisation. The adoption of electronic invoicing systems has not only benefited the tax administration but has also provided businesses with the tools to enhance their operations and accountability. Nguyen-Shuti highlighted the positive impact on income tax collection, which has shown consistent growth in revenue over the past few years. The integration of technologies like EBM into Rwanda's tax system is part of a broader digital transformation journey to streamline processes and enhance efficiency. Despite the successes in modernising tax administration, Rwanda has experienced fluctuations in its tax-to-GDP ratio, dropping from its peak of 16.1% in the financial year 2018-2019 to 15.5% currently. Nguyen-Shuti emphasised that the reasons behind these fluctuations are multifaceted, with policy interventions sometimes aiming to stimulate economic growth, impacting revenue collection percentages. However, Rwanda maintains a progressive outlook, targeting a 15.3% increase in tax revenue for the current year. The ATAF meeting in Kigali focused on addressing the financial architecture to benefit African countries, acknowledging the challenges faced by nations in mobilising domestic resources to bridge funding gaps. Technology emerged as a central theme in discussions, with participants highlighting the importance of leveraging digital tools for efficient tax administration. Rwanda's approach to tax reform includes the deployment of e-tax systems, electronic billing machines, and data analytics to create a cohesive tax ecosystem that caters to taxpayer needs while enhancing decision-making processes. The integration of diverse skill sets like data scientists and engineers underscores the evolving nature of tax administration requirements, aligning with the changing landscape of modern businesses and industries. Nguyen-Shuti stressed the need for a holistic approach to technology adoption, combining system integration, data analysis, and skill development to build a robust tax framework. By embracing a diverse talent pool and adapting to the demands of emerging sectors like construction and manufacturing, Rwanda aims to optimise revenue collection strategies and drive sustainable economic growth. The country's commitment to leveraging technology as a catalyst for efficient tax compliance sets a positive precedent for African tax administrations seeking to enhance revenue mobilisation and financial stability.