Rwanda’s Budget theme for the year 2014/2015 is infrastructure development to accelerate export growth. This reflects the government’s focus on implementing strategic policies aimed at addressing the infrastructure needs in order to increase export of goods and services. The 2014/2015 budget is projected at Rwf 1,753.3 billion compared to the previous year’s budget of Rwf 1,677.7 billion indicating an increase of 4%. Despite a drop in the global economy to 3%, and a slowdown in donor aid, the Minister of Finance expects Rwanda’s economy to grow by at least 6% in 2014, on the back of improved exports and infrastructure. The projected key economic sector performance highlights: - Mining: Growth is projected to decrease to 4% in 2014/15 due to challenges in market penetration for mineral exports from Rwanda to the world market. - Construction: The sector is set to contract from 11% to 6% in 2015 due to land administrative challenges for investors. - Agriculture: Growth is projected to increase from 3% in 2014 to 5% in 2015 due to various stimulus packages proposed by the government. - Services Sector: As the main driver of Rwanda’s economy, the service sector is expected to grow to 7% in 2015 from 4% as envisaged in the government Policy Paper for vision 2020. - Manufacturing: The sector is projected to grow by 4% in 2015 despite facing myriad challenges such as poor infrastructure, unreliable electricity, skills gap and technology amongst others. Tax Highlights - More expensive calls: The excise duty rate on telephone airtime is poised to rise from 8% to 10%. - Going digital: The Rwanda Revenue Authority (RRA) intends to adopt and incorporate the use of information communication technology platform in its efforts to improve tax administration and collection. RRA has already deployed electronically linked sales machines that provide real-time sales data for effective administration of VAT. - Educating the taxpayer: Taxpayer sensitization programs shall be rolled out this financial year across Rwanda to aid in taxpayer education. The sensitization roadshows are aimed at increasing taxpayer awareness on their obligations. In return, this move is expected to yield improved tax collection and self-assessment which makes tax administration a cost efficient exercise for the Government. - RRA at the grass roots: In addition to the collection of national taxes, the RRA shall commence the collection taxes from the district level. - Buttress of EBM machines: The Government also proposes to introduce Electronic Billing Machines (EBM) in the 2014 budget, the RRA intends to boosts its efforts to ensure the uptake of the EBMs among taxpayers. The EBM is slated to plug the current loopholes within the VAT system. Read the report prepared by KPMG to know more…