1. LOCAL REVENUE ENHANCEMENT AND MANAGEMENT
Title
17 January 2019
LOCAL REVENUE ENHANCEMENT AND MANAGEMENT
ARINDA Enock BWATETE
RALGA
Author

2. Background and context
17 January 2019
Background and context
Rwanda embarked in decentralization processes since 2000 and implemented in a phased approach;
The first phase was from 2001 to 2005 and its main purpose was :
The establishment of democratically elected and community development structures;
The set up of legal, institutional and policy reforms which institutionalised decentralization
The 2nd phase was from 2006 to 2010 and its main purpose was
Ensuring territorial restructuring: 4 provinces and Kigali City, 30 Districts, 416 Sectors, 2150 Cells and villages;
Enhancing human, financial, and institutional capacities as well as the service delivery,

3. Background and context
17 January 2019
Background and context
The current phase (the 3rd) was from 2011 to 2015 and its main purpose is the sustainability of the previous achievements and ensuring economic growth
In 2001, the 1st Fiscal and Financial Decentralization Policy was adopted;
Fiscal & Financial Decentralization Policy was revised twice in 2006 and in April 2011;
The current Fiscal & Financial Decentralization Policy was adopted together with its strategy in May 2011;

4. Background and context (Cont’d)
17 January 2019
Background and context (Cont’d)
The LG entities in Rwanda have 3 major sources of revenues to implement their functions:
Own revenues collected from decentralised taxes ( Fixed asset tax, Rental Income tax and Trading Licence tax) and fees ( e.g. Public cleaning services, market fees, land lease fees, parking fees, etc.)
Transfers from Central Government:
Block Grant to support operational costs – apart from COK Districts
Earmarked transfers to implement specific program from CG
Support to LG investment projects through the Rwanda Local Development Support Fund
Grants from Donors
Districts are financially autonomous and their plans and budgets are approved by their respective councils;

5. Background and context (Cont’d)
Title
17 January 2019
17 January 2019
Background and context (Cont’d)
Districts Planning and Budgeting guidelines were adopted in 2008 to harmonize planning and budgeting processes between central and local level;
The Fiscal Decentralization Steering Committee is in place as a high level technical layer for the process and is composed by representatives from:
Ministry of Finance and Economic Planning (MINECOFIN);
Ministry of Local Government (MINALOC)
Rwanda Revenue Authority (RRA);
Rwanda Association of Local Government Authorities (RALGA)
Rwanda Governance Board (RGB)
The lead donor in Fiscal Decentralization ( currently GIZ)
Executive Secretaries of provinces, City of Kigali and Districts
Key line Ministries – Agriculture, Education, Health, and Infrastructure
Author

6. 17 January 2019
Reform processes
The Fiscal and Financial Decentralization Strategy was implemented within the overall framework of the PFM Reform Strategy adopted by Government for the period of ;
From March 2010, the LG revenue legal framework was reviewed to improve LG capacities in generating their own revenues and matching revenue collection to service delivery;
The Zero-Cash policy introduced in October 2012 to reduce some fiduciary risks in revenue collection – Avoid collecting revenues in hand
Local Government Revenue potential study (LGRPS) which identified new taxes and fees

7. Legal Framework
The new law No 59/2011 of 31/12/2011 establishing the sources of revenue and property of decentralized entities and governing their management entered into force in January There are three types of taxes:
Fixed asset tax
Trading license tax
Rental income tax
Ministerial Order determining the modalities for the implementation of Law nº 59/2011.
Paid on 31st March
17 January 2019
Title

8. New Legal Framework (Cont…)
The new Presidential order n°25/01 of 09/07/2012 enters into force on 1st January 2012.
Market fees;
Fees charged on public cemeteries;
Fees charged on parking;
Fees on public parking;
Parking fees on Boats;
Fees on land lease;
Fees on lease of land to be collected annually on land used for agriculture and livestock activities;
Fees charged annually on land reserved for quarries exploitation.
Fees charged on public cleaning services;
Fee charged on civil marriage done outside the official business days;
Fees charged on provision of land and plot related services;
Fees charged on official documents and documents notified by the public Notary;
Fees charged on authorizations to burn firewood, clay bricks and roof tiles.
Fees charged on advertising billboard or banners;
Fees charged on boat number plate;
Fees charged on bicycle number plates;
Fees charged on communication towers ;
Fees charged on transport of materials from quarries and forests.
17 January 2019
Title

9. 17 January 2019
Collections for the districts of Kigali City as a result of the implementation of the new legal framework
From July 2011 to June 2012
Observations
Districts
Targets
Actual collections
Percentage
Gasabo
5,790,685,207
5,358,217,025
92.5%
Kicukiro
3,911,407,505
3,615,712,336
92.4%
Nyarugenge
5,843,009,424
4,860,641,222
83%
Grand Total
15,545,102,136
13,834,570,583
89%

10. 17 January 2019
Collections for the Districts of City of Kigali as a result of the implementation of the new Legal Framework
From July 2012 to June 2013
Observations
Districts
Targets
Actual collections
Percentage
Gasabo
6,294,306,813
5,686,272,059
90%
Kicukiro
4,914,173,913
4,777,838,412
97%
Nyarugenge
6,300,288,019
5,524,354,669
88%
Grand Total
17,508,768,745
15,988,465,140
92%

11. Key to success or Best Practices
17 January 2019
Key to success or Best Practices
Clear legal framework – Law No. 59 & Presidential order
Zero cash policy - Districts open banks in SACCO’s & other commercial banks
TAC – Tax advisory committee organized District on quarterly basis
Tax week campaign organized annually
Performance contracts– Revenue collection officers & Inspectors
Regular forums – organized by RALGA
Regular PFM review
Regular sensitization through UMUGANDA
FDSC meetings organized on quarterly basis
FDSC –Technical Committee organized on monthly

12. Key to success or Best Practices (cont….)
Out sourcing – Entrepreneurs who support LG revenue collection & mobilization
Involving key stakeholders including direct beneficiaries on board from the initial stage up to the implementation level;
17 January 2019
Title

13. Accountability Submit quarterly cash flow plan to MINECOFIN
Quarterly report submitted to MINECOFIN at the end of 1st month of the following quarter using IFMIS.
Revenue collected is reported through IFMIS
Zero cash policy – used to collect LG revenue
Monthly Revenue collection submitted to LG council members
PFM inspection – organized by province
Accountability day – organized on annual basis
17 January 2019
Title

14. Accountability (Cont..)
Auditor General report submitted to parliament
Public Accounts Committee (PAC) reviews the Auditor General report and calls institutions that didn’t get clean Audit to give explanations on issues raised.
Legal procedures – by Prosecutor General
17 January 2019
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15. Outstanding challenges
17 January 2019
Outstanding challenges
Lack of taxpayers database and automated systems are hindering the LG capacities to maximize their revenue potentials;
Capacities at local level as well as high staff turnover also remains a critical challenge;

16. 17 January 2019
Conclusion
The decentralization processes has contributed to the efficiency of service delivery at the community level and laid the foundation for the good governance and poverty reduction;
The political support as well as the role of Development Partners are key to the success that has been achieved;
However, increasing LG capacities to generate their own revenues remains a critical issue that requires collective efforts;
There is still a long journey to go but we need to keep the current momentum.

17. Thank You for your attention !