While taxes are essential for a government to offer public services, the level of tax rates needs to be carefully chosen and needless complexity in tax rules avoided.
On the whole, economies around the world have made paying taxes faster, easier and less costly for businesses –by consolidating payment and filing of taxes, electronic systems for filing and payment, establishing taxpayer service centres or allowing for more deductions and exemptions. Many have lowered tax rates. The changes have brought concrete results. Some economies simplifying tax payment and reducing rates have seen tax revenue rise.
For Rwanda, the reforms listed below have made it easier for companies to do business and pay taxes while at the same time increasing the revenue collections for the economy.
In 2012, Rwanda reduced the frequency of value added tax filings by companies from monthly to quarterly.
In 2014, Rwanda made paying taxes easier and less costly for companies by rolling out its electronic filing system to the majority of businesses and by reducing the property tax rate and business trading license fee.
In 2016, Rwanda made electronic filing compulsory.
Today mobile declarations and payments using mobile money have gone up to above 70% which makes the SMEs meet their tax obligations with ease.