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Tax Digitalization in Rwanda: Success Factors and Pathways Forward

SDGs Impacted

The Rwanda Revenue Authority (RRA), the national entity responsible for all tax collection, has invested heavily in digital tax services to drive Vision 2020 (a reform roadmap which aimed, among other goals, to reduce aid dependency by developing effective strategies to expand the tax base). RRA has prioritized the simplification of tax forms and processes, providing greater convenience for taxpayers while using third-party systems to gather data for a robust and efficient process. Key achievements, along with lessons from Rwanda’s tax digitalization journey, are outlined in this report.

Impact / Outcome
Since 2004, Rwanda has improved its tax-to-GDP ratio by 4.5 percentage points to 16.6% in 2016. Rwanda rose to 38th in the World Bank’s Ease of Doing Business report in 2020, up from 67th in 2010, marking the second-highest ranking for a Sub-Saharan African country. In 2018, Rwanda collected RWF 1.2 trillion (USD 1.3 billion) in total taxes in 2016 with an average annual growth rate (nominal) in collections of ~14% since 2010. The number of registered taxpayers nearly doubled between 2011 – when e-filing and e-payments were introduced – and 2018, rising from 144,000 to 242,000.
Funding sources
Public
Key Metrics
Reduced administrative delays and improved efficiency through tax digitalization
Locations
Africa, Rwanda
Sector
Financial services
Intervention lever
Policy
Operating model
Public-private partnership
Year published
06 October 2020

The EDISON Alliance

A World Economic Forum Initiative