{"id":115353,"date":"2025-11-14T16:36:28","date_gmt":"2025-11-14T16:36:28","guid":{"rendered":"https:\/\/www.africa-press.net\/rwanda\/all-news\/eac-tax-chiefs-mull-ways-to-curb-fraud-inefficiencies"},"modified":"2025-11-14T17:24:34","modified_gmt":"2025-11-14T17:24:34","slug":"eac-tax-chiefs-mull-ways-to-curb-fraud-inefficiencies","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/rwanda\/economy\/eac-tax-chiefs-mull-ways-to-curb-fraud-inefficiencies","title":{"rendered":"EAC tax chiefs mull ways to curb fraud, inefficiencies"},"content":{"rendered":"

Africa-Press – Rwanda. <\/strong><\/span>Tax chiefs from East African Community (EAC) partner states are exploring new ways to strengthen domestic resource mobilisation by tackling tax fraud and inefficiencies, which are part of broader efforts to reduce reliance on external financing and build more self-reliant economies.<\/p>\n

The officials made the commitment on November 13 during the 53rd East African Revenue Authorities Commissioners General (EARACGs) meeting, which runs through November 14. The forum aims to improve tax administration, enhance regional cooperation, and combat tax evasion and smuggling.<\/p>\n

Strengthening domestic revenue systems and tackling fraud<\/b><\/p>\n

Rwanda Revenue Authority (RRA) Commissioner General Ronald Niwenshuti said the region\u2019s progress in revenue mobilisation has been achieved through expanding the tax net, improving digital systems, investing in taxpayer education, enhancing enforcement, and building a skilled workforce.<\/p>\n

He stated that these efforts are underpinned by partnership, coordination, and knowledge-sharing among EAC member states.<\/p>\n

Despite the progress made, the region still faces challenges, he said, citing the average tax-to-GDP ratio in the EAC remains below 15 per cent, the threshold considered necessary to support strong economic growth.<\/p>\n

High tax expenditures and incentives\u2014amounting to around 2.5 per cent or more of GDP in 2022\/23\u2014continue to limit fiscal space.<\/p>\n

Illicit Financial Flows (IFFs) are another critical problem, he said, citing the AU High-Level Panel on IFFs, Africa loses $88 billion annually, up from $50 billion in 2015, with commercial activities accounting for up to 70 per cent of these losses.<\/p>\n

Rising illicit trade and smuggling are also straining customs operations. In 2023\/24, Niwenshuti pointed out, about 52 per cent of cargo was cleared through the \u201cred channel,\u201d compared to 36 per cent in 2017\/18.<\/p>\n

\u201cThis represents a dramatic rise in high-risk consignments entering our ports and borders, adding both financial and operational pressure on our customs administrations,\u201d he said.<\/p>\n

\u201cThis trend reinforces the need to strengthen border surveillance, intelligence-sharing, and the deployment of advanced technologies for cargo tracking and verification. These challenges are shared across the region \u2013 calling for shared solutions to address them.\u201d<\/p>\n

In July, RRA stated that in collaboration with its partners, its measures to combat smuggling enabled the collection of over Rwf14.6 billion, through halting 1,430 cases of smuggling \u2013 mainly observed in used clothes, alcoholic drinks, and cosmetics imports.<\/p>\n

Diana Kisaka, Assistant Commissioner for Finance at the Uganda Revenue Authority (URA) and Chairperson of East African Revenue Authorities Technical Committee (EARATC), said that the Commissioner Generals\u2019 forum brings together all EAC revenue administrations to deliberate on common tax issues.<\/p>\n

She said discussions are focusing on simplifying taxpayer registration, using artificial intelligence for revenue collection, harmonising valuation systems, and managing customs bonds.<\/p>\n

\u201cBecause our borders are also porous, we find that smuggling and movement of goods across the borders becomes difficult to control, which makes trade across our different countries difficult. It affects the markets for the goods across those regions,\u201d she said.<\/p>\n

\u201cSo, these challenges need to be addressed as a bloc so that we can get solutions that will be agreed upon and will also be implemented across the region.\u201d<\/p>\n

To combat fraudulent cargo and smuggling, Alex Mwangi, Acting Commissioner for Business Strategy, Technology and Enterprise Modernisation at the Kenya Revenue Authority, said regional administrations are modernising cargo scanning at border posts. He said that TradeMark East Africa (TMEA) was expected to present new proposals to strengthen cargo scanning and trade facilitation across the region.<\/p>\n

Addressing low tax-to-GDP ratios and harmonising tax policies<\/b><\/p>\n

Mwangi stressed the need to address common regional challenges, particularly the low tax-to-GDP ratio and narrow tax base.<\/p>\n

He explained that only a small proportion of citizens and businesses contribute taxes, while the informal sector, though large, contributes little to revenue.<\/p>\n

\u201cIf we broaden the tax base, then it means we have many people contributing to taxes and therefore you optimise revenue mobilisation,\u201d he said.<\/p>\n

Kisaka stressed the need to harmonise VAT rates and tax policies to attract investment and ensure fairness across the region. Regarding the low tax-to-GDP ratio, she said incomplete registration and a large informal economy are major constraints.<\/p>\n

\u201cIf everyone contributes, the tax rate can remain moderate while revenues increase,\u201d she added.<\/p>\n

According to Mwangi, tax expenditure remains high\u2014about 3 per cent of GDP\u2014due to tax breaks and exemptions, further limiting collections.<\/p>\n

He credited the East African Revenue Authorities Technical Committee for promoting digital transformation and knowledge exchange, citing Kenya\u2019s adoption of Rwanda\u2019s e-invoicing system as an example of practical collaboration.<\/p>\n

Godfrey Kabera, Rwanda\u2019s State Minister for National Treasury, highlighted that EAC countries are seeing strong macroeconomic performance and fiscal resilience. In 2024\/25, regional GDP growth averaged 5.8 per cent, while annual revenue growth reached 16 per cent, exceeding national targets.<\/p>\n

The tax-to-budget ratio rose from 56 per cent in 2022\/23 to 62.6 per cent in 2023\/24, indicating that more of the national budgets are being financed domestically.<\/p>\n

Still, challenges remain, he said, citing the region\u2019s average tax-to-GDP ratio which is currently at 14.4 per cent, below the 15 per cent threshold commonly viewed as necessary to accelerate structural economic transformation. It also remains far below the levels observed in many middle- and high-income countries, including the OECD average of 34.2 per cent, he added.<\/p>\n

\u201cThis gap highlights the need for continued improvement in both policy and administration aimed at optimizing domestic resource mobilization. It also underscores the value of regional collaboration, where shared experience, harmonised practices, and coordinated enforcement can help countries respond more effectively in the face of uncertainty,\u201d he said.<\/p>\n

Kabera cautioned against \u201cuncoordinated tax incentives\u201d that lead to harmful competition and revenue loss. \u201cGreater policy alignment would strengthen the integrity of our regional market and simplify compliance for cross-border businesses,\u201d he said.<\/p>\n

Priorities to consider for regional cooperation<\/b><\/p>\n

Niwenshuti indicated five key priorities for regional collaboration going forward.<\/p>\n

They include to further harmonisation of tax policies and systems, which can minimise harmful tax competition and accelerate implementation of the Domestic Tax Harmonization Framework; to improved cross-border surveillance and enforcement, to combat smuggling, trade (product) mis-invoicing, and illicit financial flows; and enhanced digitalisation and data exchange, so that we can close compliance gaps and detect risks in real time;<\/p>\n

Others are more strategic tax reforms and improved management of tax expenditures, to broaden the tax base, enhance fairness, and support fiscal sustainability; and continued knowledge-sharing and peer learning, since our progress moves faster when we learn from each other\u2019s experience.<\/p>\n

For More News And Analysis About Rwanda<\/span> Follow Africa-Press<\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Rwanda. Tax chiefs from East African Community (EAC) partner states are exploring new ways to strengthen domestic resource mobilisation by tackling tax fraud and inefficiencies, which are part of broader efforts to reduce reliance on external financing and build more self-reliant economies. The officials made the commitment on November 13 during the 53rd […]<\/p>\n","protected":false},"author":84,"featured_media":115351,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,15],"tags":[3875,343,8704,758,8703,8702],"class_list":["post-115353","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-east-african-community","tag-fraud","tag-illicit-financial-flows","tag-rwanda","tag-tax-base","tag-tax-to-gdp-ratio"],"yoast_head":"\nEAC tax chiefs mull ways to curb fraud, inefficiencies - Rwanda<\/title>\n<meta name=\"description\" content=\"Tax chiefs from East African Community (EAC) partner states are exploring new ways to strengthen domestic resource mobil ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/rwanda\/economy\/eac-tax-chiefs-mull-ways-to-curb-fraud-inefficiencies\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"EAC tax chiefs mull ways to curb fraud, inefficiencies\" \/>\n<meta property=\"og:description\" content=\"Tax chiefs from East African Community (EAC) partner states are exploring new ways to strengthen domestic resource mobil ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/rwanda\/economy\/eac-tax-chiefs-mull-ways-to-curb-fraud-inefficiencies\" \/>\n<meta property=\"og:site_name\" content=\"Rwanda\" \/>\n<meta property=\"article:published_time\" content=\"2025-11-14T16:36:28+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-11-14T17:24:34+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/rwanda\/sites\/23\/2025\/11\/sm_1763128436.681325.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"560\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/economy\/eac-tax-chiefs-mull-ways-to-curb-fraud-inefficiencies#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/economy\/eac-tax-chiefs-mull-ways-to-curb-fraud-inefficiencies\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"EAC tax chiefs mull ways to curb fraud, inefficiencies\",\"datePublished\":\"2025-11-14T16:36:28+00:00\",\"dateModified\":\"2025-11-14T17:24:34+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/economy\/eac-tax-chiefs-mull-ways-to-curb-fraud-inefficiencies\"},\"wordCount\":1055,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/economy\/eac-tax-chiefs-mull-ways-to-curb-fraud-inefficiencies#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/rwanda\/sites\/23\/2025\/11\/sm_1763128436.681325.jpg\",\"keywords\":[\"East African Community\",\"fraud\",\"Illicit financial flows\",\"Rwanda\",\"Tax base\",\"Tax-to-GDP ratio\"],\"articleSection\":[\"all news\",\"Economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/rwanda\/economy\/eac-tax-chiefs-mull-ways-to-curb-fraud-inefficiencies#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/economy\/eac-tax-chiefs-mull-ways-to-curb-fraud-inefficiencies\",\"url\":\"https:\/\/www.africa-press.net\/rwanda\/economy\/eac-tax-chiefs-mull-ways-to-curb-fraud-inefficiencies\",\"name\":\"EAC tax chiefs mull ways to curb fraud, inefficiencies - 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