Rwanda Revenue Authority (RRA) has acknowledged the pivotal role of research in implementing digital solutions within taxation, which facilitates voluntary compliance among taxpayers and increases collected revenues. These efforts have led to a reduction in the costs associated with accessing various services, benefiting the private sector.

This Friday, RRA hosted the 2nd Research Day in partnership with the International Center for Tax and Development (ICTD), under the theme ‘Digitalization in Taxation : Prospects for Effective Revenue Mobilization’.

Commissioner General Bizimana Ruganintwali Pascal reaffirmed RRA's cultural shift and commitment to research excellence in tax administration as key to maintaining the organization's status as a progressive, forward-thinking, people-centric tax authority, mobilizing resources for the country’s development.

With Rwanda's 2050 vision, Tax research has got a critical role to play, to become fiscally self-reliant and increase the ratio of tax revenues to GDP from current l15.0% up to 34%.

Reiterating the theme for this year's Research Day, Ruganintwali said it is pertinent to RRA in many ways, as digitalization stands as a key pillar and enabler.

“Digitalization is not an abstract concept for RRA but a lived reality in the provision of tax services in Rwanda. Some of the first steps along this journey were the e-filing and e-payments initiatives. We have since progressed, introducing and expanding the use of electronic billing machines and streamlining customs processes,” he said.

“More recently we have introduced MyRRA platform, a one-stop shop for taxpayer account information allowing taxpayers to view their status across all tax types, review outstanding tax amounts, and anticipate future declarations,” he added.

Since the last research day, key ideas exchanged have influenced various decisions, including addressing the prevalence of nil-filers in the taxpayer registry. In response, RRA deregistered over 40,000 nil-filing taxpayers, improving the quality of our tax registry and relieving taxpayers of an unnecessary burden.

Additionally, RRA and the Ministry of Finance and Economic Planning (MINECOFIN) conducted a joint study reviewing local taxes and fees in Rwanda. This resulted in the removal of public cleaning and market fees, the lowering of property tax rates, and measures to harmonize local taxes across districts.

The second RRA Research Day brought together experts from various backgrounds : public institutions, academic organizations, civil society, policy and research networks, and the private sector.

“Knowledge shared between these groups will not only help spark new ideas and solutions that help RRA innovate and improve but also enable a better common understanding of taxation in Rwanda,” Ruganintwali added.

Yves Iradukunda, Permanent Secretary at the Ministry of ICT and Innovation, acknowledged the significant impact of digitalization, and commended RRA for leveraging systems to advance taxation and foster business growth. However, there is still a long journey in embracing technology in formalizing some aspects of doing business.

“We are focusing on digital literacy, but more importantly, we want to continue working with Rwanda Revenue Authority to enable analytics for better predictions and to support businesses in formalizing,” he said

According to Jean Louis Kaliningondo, RRA Deputy Commissioner General, with the advancement of technology, there is a huge possibility of digitalization, such as deploying Artificial Intelligence (AI). Many tasks may be undertaken by technology, however, the human element remains essential to set up these AI tools.

“And there is always a supervisory eye on the outcome of this kind of service delivery. So if there is one keyword for the future, AI is the keyword in tax administration,” he added.

Dr. Giulia Mascagni, Research Director at ICTD, pointed out the importance of inclusion in digitalization. Globally, demographic segments such as senior citizens, small and medium businesses, and less savvy individuals might face challenges with fully digitalized systems.

She urged tax administrations to resort to deploying IT solutions for international cooperation in exchanging information for tax purposes, as all these tools “are already here; we do not have to wait ten years.”

As part of this research day, many researchers were given an opportunity to present research papers, with key ideas to be considered in decision-making in taxation.