CHALLENGES OF DECENTRALISED TAX SYSTEM IN RWANDA. CASE OF PROPERTY TAX IN RWANDA: 2020-2021
Abstract
Statistics showed that decentralized tax, including collection of rental income tax, building or property tax/property tax and business license tax was 31.12% of the tax in the fiscal year 2013-2014. In 2014-2015, it was 37.3%. In 2015-2016, it was 29.32%. From 2016 to 2017 it was 35.23 % (RRA, 2021). The study assessed three specific objectives, including to examining how poor taxpayer’s perception affects property tax revenue collection, to examining the effect of Lack of Taxpayers’ Education on the property tax revenue collection and to assess how the lack of Compliance tax culture affects property tax revenue collection. This research is based on a descriptive design using both quantitative and qualitative approaches. The study is also based on correlation design in the sense that the relationship between independent and dependent variables must be determined. The study population is all property taxpayers in Rwanda. The sample size is 385 property taxpayers in the five selected districts. Questionnaires were used as a data collection tool. Descriptive statistic and inferential statistics were used to analyse data. Findings showed that the poor Taxpayer’s Perception on property tax is at a very high level, the lack of Tax Taxpayers’ Education on property tax is at a high level and the lack of tax compliance culture among Taxpayers was at a high level. The study revealed a negative moderate correlation between challenges of decentralized tax system and Property Tax collection. The coefficient of determination showed that challenges of decentralized tax system contribute a reduction of 40.19% to property tax collection in Rwanda. Some recommendations have been formulated to different personalties such as Rwanda Revenue Authority (RRA) management, To the Local government authority and to taxpayers. To RRA, Training is needed to increase the Taxpayer’s Perception on property tax which was found poor at a very high level. This will help them to increase service distribution to taxpayers. To the Local government authority, it should increase facilities to help taxpayers to access tax collectors at workplaces because findings showed these challenges at a high level. To taxpayers, they should try to increase their level of tax compliance culture because findings showed that this level was low. This will help the local government to increase fund for development.
Key Terms: Decentralized Tax System, Property Tax, tax collection
CITATION: Nshimiyimana, V., & Niyongabo, P. (2023). Challenges of decentralised tax system in rwanda. Case of property tax in Rwanda: 2020-2021. The Strategic Journal of Business & Change Management, 10 (3), 61 – 79.
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DOI: http://dx.doi.org/10.61426/sjbcm.v10i3.2686
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