Kigali 9th August 2017: Revenue collection in FY 2016/17 hit a new record of Rwf, 1103.0 billion collections as compared to a target of Rwf 1094.3 billion, which represents an achievement of 100.8% translating to Rwf 8.7 billion above the target.    Tax revenue collection for FY 2016/17 was Rwf 1,086.8 billion while the target was Rwf 1081.4 billion; this is an achievement of 100.5%, and an excess of Rwf 5.4 billion over the target. Tax revenue posted a growth of 10.2% during FY 2016/17. Compared to FY 2015/16 performance of Rwf, 986.7 billion this makes a nominal increase of Rwf 100.2 billion. Table 1: Tax revenue performance by major tax heads

Tax heads	Target FY 2016/17	Actual FY 2016/17	Variance	Performance rate	Actual FY 2015/16	Growth in FY 2016/17	Nominal increase
PAYE	254.8	257.7	2.9	101.1%	229.7	12.2%	28.1
Profit Tax	178.3	190.5	12.2	106.8%	159.3	19.5%	31.1
VAT	352.4	352.4	0.0	100.0%	323.2	9.0%	29.2
Excise Duties	146.9	134.2	-12.7	91.3%	138.1	-2.8%	-3.9
Import Duties	75.7	76.5	0.8	101.1%	72.9	4.9%	3.6
Other Taxes	73.4	75.6	2.2	103.0%	63.5	19.0%	12.1
TOTAL TAX	1081.4	1086.8	5.4	100.5%	986.7	10.2%	100.2

RRA revenue collection to budget increased from 55.36% in FY 2015/16 to 56.44% in FY 2016/17. Local Government taxes and fees collected by RRA totaled Rwf 47.9 billion, which is an achievement of 98% of Rwf 49.1 billion target resulting in a shortfall of Rwf 1.2 billion. Compared to 40.5 billion collected in 2015/16, this represents year-on-year growth of 18.6%. The below target performance in Local Government taxes is a result of not selling off some properties/assets of districts worth Rwf, 1.4 billion of some yet this informed the basis of their targets for FY 2016/17. FY 2016/17 revenue performance associates with key economic indicators where the economy recorded a slow performance in first three quarters; real GDP grew by 5.4%, 2.4%, and 1.7% for Q1, Q2 and Q3 respectively, and inflation reached 6.8%. This low real GDP growth is below the annual projection of 6.0%. The slow economic performance is attributed to poor agricultural production due to bad weather also food scarcities accounted for inflationary pressures with price indices for food and non-alcoholic beverages reaching a record high 18.6%. Subsequently, revenue from domestic excise duty decreased by 7.2%, equivalent to Rwf 5.2 billion in nominal terms as increased prices of food left consumers with less money to spend on non-essential goods. Other factors that had a negative effect on tax performance include the slowdown in CIF growth of imports, especially in non-EAC imports and lower taxable sales as a proportion of turnover because of increases in exempt sales and exports. This achievement of the revenue target confirms the potential that RRA has to effectively and optimally mobilise the revenue needed to finance Rwanda's development goals. Key Reforms: With the exception of past reforms particularly the automation of processes to bring efficiency in tax administration, in FY 2016/17 we introduced; Unified Declarations for PAYE and Social Security, Regional Electronic Cargo Tracking System, and VAT Verification Control System, which has decreased leakages in VAT collections and eased refund process. On behalf of the Board and Staff, I wish to extend our utmost appreciation to the tax paying community in Rwanda for honouring their tax obligations. RRA is committed to making payment of taxes in Rwanda easier by embracing use of technology and continuously improving taxpayer education and sensitisation programmes. TUSABE Richard Commissioner General