Rwanda’s Districts See Significant Growth in Own Revenue Collections
Over the past decade, Rwanda’s 30 districts have nearly tripled their own revenue collections. This progress is being supported by the Rwanda Revenue Authority (RRA) and the Rwanda Association of Local Government Authorities (RALGA), with a focus on further growth in the current fiscal year and beyond.
District own revenues refer to resources that a district can mobilize and manage independently, rather than relying on the national treasury. These include rental income tax from individuals who earn income by renting out fixed assets such as land and buildings, immovable property tax based on market value, and trading license tax for those starting business activities within a district.
At the East African Local Government Forum (EALGF) meeting on July 23, Dominique Habimana, Secretary General of RALGA, highlighted the improvements made in collecting local revenues. He noted that districts are working closely with the RRA and other relevant entities to achieve these results. The forum brought together delegates from East African Community member states, emphasizing the importance of regional cooperation in economic development.
Habimana mentioned that for the 2025/26 fiscal year, local governments in Rwanda have set a higher revenue collection target—around 20% more than the previous year. He believes this increase is achievable due to the country’s steady progress. “Collecting more means being able to serve citizens better,” he said. “Digitalization has played a key role in improving collection efficiency, along with various local economic development initiatives.”
As projects like roads, markets, and business centers are implemented, they stimulate economic activity. This, in turn, boosts citizens’ incomes and enhances their ability to pay taxes, rent fees, and other local levies. Habimana emphasized that this progress supports Rwanda’s broader goal of building resilience and self-reliance.
Trends in District Revenue Growth
Ernest Karasira, Assistant Commissioner in charge of the Provincial and Decentralised Revenue Division at RRA, shared insights into the trends in district revenue growth. Since the RRA began collecting revenues on behalf of districts in the 2015/16 fiscal year, collections have increased from Rwf40.5 billion to Rwf105.9 billion in 2024/25. For the 2025/26 fiscal year, the target has been set at Rwf121.9 billion.
Karasira noted that as districts’ own revenues rise, so do their budgetary needs, requiring continued support from the central government. “The increase reflects the combined efforts of RRA and the districts,” he said. “But there is still a need to do more to better meet the financing needs of districts.”
He pointed out that in some cases, a district’s own revenue accounts for less than 20% of its budget. “Through our partnership with decentralised entities, we will continue identifying and tapping into potential revenue sources to enhance collections,” Karasira added.
Addressing Gaps in Property and Rental Income Taxes
Karasira highlighted the importance of addressing key areas with underperformance, particularly property tax and rental income tax. “We are currently working with the National Land Authority to enable real-time data integration, allowing us to identify and register all individuals liable for property tax,” he explained.
Rental income tax also presents significant untapped potential. “There are still many landlords who are not paying taxes on rental income. In collaboration with local governments, we aim to identify all such property owners and bring them into the tax net,” he said.
An ongoing exercise in the City of Kigali involves conducting a census of all rented property owners to ensure they are registered and taxed accordingly. “If these two areas are properly addressed, they will significantly contribute to increasing local revenue collections,” Karasira concluded.
Why RRA Collects Revenues on Behalf of Local Governments
Habimana explained that RRA collects revenues on behalf of local governments as mandated by law. He stated that RRA is the national body responsible for collecting public revenues and has developed the expertise, systems, and institutional strength needed for efficient collection.
“I think the important thing here is the efficiency to try to see in which way actually this exercise can be done better,” he said. He emphasized that RRA collects these revenues on behalf of local governments and works closely with them to identify local tax potential and develop tailored collection strategies—district by district, including in the City of Kigali.
“This is a joint effort built on coordination, transparency, and shared responsibility,” Habimana added.
