Developing capacity for tax administration: The Rwanda Revenue Authority

A case study prepared for the project ‘Capacity, Change and Performance’ organised by ECDPM. In November 1997, the Rwandan transitional parliament passed a law (No. 15/97) establishing the Rwanda Revenue Authority (RRA) as a body corporate charged with administering the collection of taxes and customs and excise duties on behalf of the government. The establishment of the RRA marked the beginning of a remarkable process of organisational development, which has seen the transformation of the government's capacity to manage revenue collection. In just six years, the RRA has become a performing and respected institution that has helped increase domestic revenue generation from 9.5% to 13% of GDP. This is in stark contrast to the situation prior to the creation of RRA. Revenue collection had been the responsibility of a department within the Ministry of Finance that was characterised as incompetent, inefficient and corrupt. Revenue collection was not taken seriously by either the government or the public at large. This case study looks at the first six years of the RRA and identifies the factors that have contributed to its remarkable achievements. What has transformed it into a performing and respected institution? What have been the factors driving change? How important has capacity development been to this record of achievement? How has external assistance facilitated the process of transformation?