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ICF and Government of Rwanda Announce New Project to Modernise Tax Administration
This latest project builds on the considerable progress achieved by the Government of Rwanda to date, whose commitment to improving the country's business environment recently resulted in Rwanda being the first ever Sub-Saharan African economy to be named "top reformer" in the World Bank's Doing Business 2010 report.1
The tax administration project is ICF's third project in Rwanda, and comes as the organisation celebrates the success-to-date of its Rwanda Investment Climate Project, which has established four new commercial courts, cleared a backlog of more than 3,000 pending cases and addressed a further 1,000 cases.
The new project, endorsed by both the Government of Rwanda and the private sector, aims to streamline administration of domestic taxes at the RRA in order to reduce time and costs faced by business tax-payers. Key project objectives include capacity building and training, improving communications and customer care at the RRA, as well as the establishment of e-filing and e-payment systems. The project will increase transparency, create a fair, competitive and consistent tax regime and a more conducive business environment in Rwanda. In addition, the project will aim to raise awareness about the country's tax system, RRA services and procedures and is intended to be complete within a period of 20 months.
ICF's Chief Executive Officer, Mr Omari Issa, said: "We are delighted to be working in partnership with the Government of Rwanda on this project to improve and modernise tax administration. We have already seen significant and tangible improvements in Rwanda from our two projects to date and are confident that a more efficient and streamlined tax system will deliver considerable benefits to business and individuals throughout the country.
"The commitment of the Government of Rwanda raises the benchmark for investment climate improvements across Africa. Governments across the continent must follow Rwanda's example - sustain and build on progress achieved to date, and take increasingly proactive measures to address business fundamentals. Rwanda too must build on its success and we are committed to supporting the Government in this process with any future projects determined entirely by Rwanda's needs. Now the focus must be on consolidating gains, sharing knowledge and ensuring all improvements made are truly self-sustaining. By doing this and continuing to reduce the red tape, time and costs associated with doing business, I am confident we will achieve real and tangible change across the continent."
Fulfilling tax obligations such as VAT, income tax and Pay As You Earn (PAYE) remains particularly challenging in Rwanda. Finalising return filing and payment of either VAT, income tax, or PAYE can take an average of over 23 days. Many enterprises have highlighted the constraints of the system as a significant barrier to doing business in the country. The limitations of the tax administration system are partly due to a shortfall of skills, in areas such as accounting, and partly due to the archaic l filing process. Key elements of domestic taxes processing still involve manual processing and taxes requires people to go to the RRA office and then to a bank to make their payment, resulting in long queues.
The new system will be an add-on to SIGTAS (IT tax administration system) used successfully in other African countries. It will introduce electronic taxation and enable RRA to combine collection of PAYE, and contributions of national social security fund and health insurance, which in turn will relieve taxpayers from interacting with multiple institutions.
ICF is also working with the Government of Rwanda on the Rwanda Investment Climate Project and an Energy and Power Sector project. The Energy and Power Sector project aims to secure private investment for electricity generation and increase access to energy supplies from the current 5% of the population to 16% by 2012. Two years into its three year lifecycle, the Rwanda Investment Climate Project is celebrating the delivery of real, tangible results through the establishment of a commercial court system, improved land titling and registration, and support for the creation of a Rwanda Commercial Registration Services Agency (RCRSA).
ICF was established in 2006 to remove the barriers that currently exist to doing business in Africa. ICF is currently active in ten African countries and is working on four pan-regional projects and four special initiatives.
For more information on ICF visit www.icfafrica.org
1. The World Bank's Doing Business Report 2010 tracks the ease of doing business in 183 countries around the world. The 'Doing Business 2010' report saw Rwanda jump from 143rd to 67th place in the rankings, with Liberia also being named among the "top ten reformers". Other African countries noted for improving their ease of doing business rankings include Burkina Faso, Liberia, Mali, Sierra Leone, Zambia and Cape Verde. Please see www.doingbusiness.org for more information.
Investment Climate Facility for Africa
The Investment Climate Facility for Africa is a unique public-private partnership between government and business that aims to help Africa create a more attractive business environment and realize its potential as a global player and trading partner. ICF works to remove real and perceived obstacles to domestic and foreign investment by assisting Africans to prepare and promote the continent as an investment destination. ICF success is measured against higher levels of investment, faster economic growth, enhanced business opportunities and sustained returns for investment. ICF has the support of key Africa institutions, international development partners and private sector companies.
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