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Finmin Ndagijimana unveils $3.8 bn budget, focus on economic recovery,accelerating transformation
Rwanda’s Finance Minister Uzziel Ndagijimana today tables the budget for the fiscal year 2021-2022. In the finance bill, the government had planned to spend $3.8 billion in the next fiscal year, which represents an increase of 9.8 per cent from the previous budget. Angello Musinguzi, Senior Tax Manager at KPMG Rwanda joins CNBC Africa for more.
Tue, 22 Jun 2021 14:35:52 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
- Government's emphasis on health sector funding due to COVID-19 impact
- Efforts to fund 60-77% of the budget domestically through tax reforms and increased revenue collection
- Commitment to infrastructure development and economic recovery despite pandemic challenges
Rwanda's Finance Minister Uzziel Ndagijimana recently presented the budget for the fiscal year 2021-2022, outlining a plan to spend $3.8 billion, representing a 9.8% increase from the previous budget. The government's focus on economic recovery and accelerating transformation was evident in the budget allocation. In an exclusive interview with CNBC Africa, Angello Musinguzi, Senior Tax Manager at KPMG Rwanda, shed light on the key aspects of the budget and the government's strategies to fund the budget internally. Musinguzi highlighted that while most budget lines remained consistent, there was a notable emphasis on the health sector due to the ongoing impact of the COVID-19 pandemic. The government allocated significant resources to the health sector to address the challenges posed by the pandemic. Musinguzi further explained that the government aimed to fund 60-77% of the budget domestically, a significant achievement for Rwanda. He emphasized that 62% of the funding would come from domestic taxes and customs, indicating a strong commitment to increasing revenue generation internally. To achieve this, the government planned to implement tax administrative measures and amend tax laws, such as the income tax law and VAT law, to enhance revenue collection. The government's focus on domestic funding aligns with its goal of contributing to the national development strategy and reducing reliance on external sources. Musinguzi highlighted key areas for revenue generation, including digital taxation and targeting multinational companies to ensure fair tax contributions. He also mentioned efforts to improve tax processes and procedures to expand the tax base. Despite the challenges posed by the COVID-19 pandemic and the disruptions to the national development strategy, the government remained steadfast in its commitment to infrastructure development and economic recovery. Musinguzi noted that the government planned to resume infrastructure projects, including the construction of digital international airports, energy infrastructure, and road improvements. The budget allocation towards infrastructure development aimed to revitalize the economy and address the impact of the pandemic on key sectors. As Rwanda implemented new COVID-19 restrictions, such as curfews and inter-district movement limitations, there were concerns about the potential impact on revenue collection. While these measures were not explicitly addressed in the budget, there may be a need for a revised budget in the future depending on the evolving situation. Musinguzi expressed satisfaction with the increased fiscal spending but noted areas for improvement, such as allocating more resources to education and enhancing measures to boost exports. He suggested that deficit financing could be utilized to address these priorities and further strengthen Rwanda's economic resilience.
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