On February 5-7th, the International Centre for Tax and Development (ICTD) is holding its seventh annual meeting in association with the Rwanda Revenue Authority (RRA). This comes at a time when taxation is high on the agenda for policymakers as a central means of financing sustainable development.
The Commissioner General of the RRA, Pascal Ruganintwali, will open the meeting on behalf of the Minister of Finance and Economic Planning, Dr. Uzziel Ndagijimana. The meeting brings together over 120 researchers and officials from 20 African and 6 international countries.
In line with Rwanda’s self-reliance policy, the government has prioritised strengthening tax collection in order to reduce dependency on foreign aid and increase public spending on key areas including infrastructure, education, agriculture, and health[iii]. While ten years ago, nearly half of Rwanda’s revenue was composed of grants, this year the government plans to finance 68% of the budget from domestic resources and only 16% from grants.
The RRA has achieved this progress by revising tax laws to address weaknesses and close loopholes as well as implementing new technologies (including e-tax, mobile phone declaration, electronic billing machines, and electronic single window) to facilitate compliance[v]. It has also invested in research to inform improvements in tax policy and administration.
Since 2015, the RRA and the ICTD have collaborated closely on several research projects. The organisations jointly conducted the first large-scale tax experiment in Africa, which brought in an additional Rwf8.7 billion in revenue in 2016.
The CEO of the ICTD, Prof Mick Moore, said: “Rigorous research is crucial for governments seeking to increase tax revenue in a manner that is efficient, equitable, and conducive to economic growth and good governance. We’ve been very impressed by the RRA’s commitment to research, and hope that its success will inspire other African revenue administrations to increase their focus on analysing their own data and generating evidence to inform policy and practice.”
The meeting, on the theme “What next for tax research in Africa?” will cover a range of topics including taxation and accountability, the use of technology in tax administration, and the taxation of multinational business, wealth, property, and the extractive industries.
Mr Ruganintwali, said: “We are proud to be hosting this meeting, with researchers and policymakers from across the continent and beyond. We are eager to engage on the latest research findings in tax and development, as well as to contribute to the ICTD’s research agenda for the next five years.”
Members of the press are welcome to attend. The opening ceremony, featuring remarks by Prof Moore and Mr Ruganintwali, will begin at 9am on February 5th at Lemigo Hotel.
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Notes to editors:
The International Centre for Tax and Development (ICTD), based at the Institute of Development Studies (IDS), is a global policy research network, devoted to improving the quality of tax policy and administration in developing countries, with a special focus on sub-Saharan Africa. The ICTD is funded by UK Aid from the UK government and the Bill & Melinda Gates Foundation. For more information see: www.ictd.ac
The first action area of the Addis Ababa Action Agenda on Financing for Development is mobilising domestic public resources, described as “critical to achieving the Sustainable Development Goals.” As a member of the Addis Tax Initiative, Rwanda has committed to stepping up domestic resource mobilisation.
See last week’s article in The New Times: https://www.newtimes.co.rw/news/treasury-proposes-public-spending-increment
Rwanda’s tax to GDP ratio has increased from below 10% in 2000 to almost 15% in 2016, the amount considered necessary to fund adequate public services. In 2009, 48% of Rwanda’s revenue came from grants, while 50% came from taxes. In 2016, grants had decreased to 25% and tax revenue had increased to 66%. For the full data, see the Government Revenue Dataset Explorer here.
For a summary of the research project and its results, see the brief here: https://www.ictd.ac/publication/africa-tax-experiment-sb/ For news coverage, see the article in The New Times here: https://www.newtimes.co.rw/section/read/205784 The RRA and the ICTD are conducting further joint research on value-added tax compliance and the effectiveness of taxpayer education programs.