Rwanda unveils new measures to support businesses amid COVID-19

The Rwanda Revenue Authority has unveiled temporary measures to support businesses in the wake of a fresh lockdown in Kigali city. The country's Deputy Commissioner General, Jean-Louis Kaliningondo, discussed the impact of the lockdown on revenue collection and the steps being taken to assist taxpayers during these challenging times. The measures have been put in place to alleviate the financial burden on businesses and foster a sense of trust and cooperation between the tax administration and the taxpayer community. The goal is to ensure that businesses can navigate through these difficult times and eventually regain stability and growth. The Deputy Commissioner General highlighted the surge in revenue collection in the Customs Department during the quarter, attributing it to government initiatives in the manufacturing and construction sectors. However, the lockdown resulted in a halt to this growth, posing challenges similar to those faced during the initial lockdown. Despite the obstacles, the Rwanda Revenue Authority remains optimistic about economic recovery, driven by a combination of improved monitoring tools, analytics, and support for businesses. The tax administration has implemented various measures to aid taxpayers, such as extending filing deadlines, offering online services, and temporarily suspending strict debt recovery measures. These initiatives aim to lessen the financial strain on businesses and create a conducive environment for compliance. By demonstrating empathy and flexibility towards taxpayers, the tax administration seeks to build a foundation of trust and collaboration that will enhance overall compliance. However, achieving revenue targets for the fiscal year remains uncertain due to the evolving nature of the pandemic. The Deputy Commissioner General emphasized the importance of government interventions in containing the spread of COVID-19 to facilitate the reopening of economic activities and boost tax collection. The success of these efforts will determine the country's ability to meet its revenue goals amidst the ongoing challenges. Challenges in tax collection during the pandemic have stemmed from reduced workforce capacity and limited internet connectivity in some areas. Despite these obstacles, the Rwanda Revenue Authority has strived to adapt to remote work and enhance operational efficiency. The tax administration continues to explore innovative solutions to address these challenges and maintain tax compliance amid the changing working environment. Addressing tax leakages remains a priority for Rwanda's revenue authorities, with measures in place to combat transfer pricing and ensure tax transparency. Efforts to update control rules for transfer pricing and align with international standards demonstrate the country's commitment to combating illegal tax practices. By leveraging digitalization and implementing control mechanisms, Rwanda aims to strengthen its tax administration and mitigate revenue losses due to tax evasion. In conclusion, the Rwanda Revenue Authority's proactive measures to support businesses and enhance tax compliance reflect a commitment to economic stability and growth amidst the challenges posed by the ongoing pandemic. By fostering cooperation and implementing strategic interventions, the tax administration aims to mitigate financial strains on businesses and facilitate a smooth recovery in the post-lockdown period. The resilience and adaptability demonstrated by Rwanda's revenue authorities are crucial in navigating the uncertainties of the current economic landscape and paving the way for sustainable growth and development.