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Rwanda expected to spend $3.8bn in next fiscal year
The Rwandan government is expected to spend some $3.8 billion in the next fiscal year 2021-2022, which represents an increase of 9.8 per cent from the previous budget. Domestic resources at 67 per cent will finance the budget. Angello Musinguzi, Senior Tax Manager at KPMG Rwanda joins CNBC Africa for more.
Wed, 12 May 2021 12:23:40 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Increase in the budget figures reflects economic improvements in key sectors like telecommunications, financial services, and real estate, driving revenue generation and supporting the proposed budget.
- Rwanda prioritizes tax compliance through initiatives like electronic billing systems to broaden the tax base and enhance revenue collection, aiming to achieve budget targets through effective tax education programs.
- The country aims to reduce external funding reliance and focus on domestic revenue generation, with key sectors such as financial institutions and telecommunications expected to lead economic growth and offset losses in pandemic-impacted sectors like tourism and transportation.
The Rwandan government is gearing up to spend around $3.8 billion in the upcoming fiscal year 2021-2022, marking a 9.8% increase from the previous budget. This fiscal plan places a heavy reliance on domestic resources for financing, with a significant 67% of the budget expected to be funded internally. Angela Lowe-Singhuzi, Senior Tax Manager at KPMG Rwanda, shed light on the budget estimates in a recent interview with CNBC Africa, highlighting key areas of focus and the overall economic outlook. The increase in the budget figures can be attributed to notable improvements in sectors such as telecommunications, financial services, real estate, and wholesale and retail trade despite the challenges posed by the COVID-19 pandemic. These sectors are expected to contribute significantly to the proposed budget, ensuring a steady flow of revenue. Rwanda has implemented initiatives to enhance tax compliance, including electronic billing systems, to broaden the tax base and curb tax evasion. The government is optimistic about achieving its budget targets with a strong emphasis on tax education and awareness programs to ensure full compliance from taxpayers. While Rwanda's debt levels are on the rise, it remains sustainable, with the majority of the budget being financed through domestic revenue generation. The country aims to reduce its reliance on external funding sources and ramp up domestic borrowing to strengthen its financial independence. When it comes to revenue generation in the local market, key sectors like financial institutions, telecommunications, and retail and wholesale trade are expected to drive economic growth and offset losses incurred in sectors heavily impacted by the pandemic such as tourism and transportation. The government is extending support to sectors struggling to recover from the effects of COVID-19, offering financial aid and incentives to revive business activities. Despite the ongoing challenges posed by the pandemic, Rwanda is optimistic about its economic recovery and is working towards bridging the revenue gap through strategic measures and sector-specific interventions.
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