![Page 1: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/1.jpg)
Analysing tax compliance with administra5ve data in Rwanda
Giulia Mascagni, Nara Monkam, Denis Mukama, Christopher Nell
ICTD Annual Mee-ng February 2016
![Page 2: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/2.jpg)
Part 1 Ini5al descrip5ve results
2
![Page 3: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/3.jpg)
Tax types in Rwanda • VAT and PAYE largest contributors • Decline in interna-onal trade taxes • Small share of PIT and CIT: compliance?
3
![Page 4: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/4.jpg)
Tax collec5ons by size
4
• 60% PIT (real) collec-on from top 10% • 85% CIT (real) collec-on from top 10%
![Page 5: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/5.jpg)
Tax by loca5on
5
![Page 6: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/6.jpg)
Losses and nil-‐filers
6
![Page 7: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/7.jpg)
Audit rates • By tax types:
– VAT about 10% – PIT about 3% – CIT about 2%
• Mostly taxpayers registered in Kigali • Mostly large and top-‐medium taxpayers
• Results feed into Experiment 1 – Loca-on, stra-fica-on, …
7
![Page 8: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/8.jpg)
Compliance gap • Range of compliance based on audit data
– Probably closer to upper bound • Higher compliance gap in PIT, then CIT, then VAT, lastly PAYE • Larger for small and medium and outside of Kigali
8
![Page 9: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/9.jpg)
Effec5ve tax rates • Calculated as tax payable / overall income • Progressive on paper but regressive in prac-ce
• Lower rate in the real regime vs. lump sum – Compliance costs – Enforcement pressure – Audit probability
• More work to be done
9
![Page 10: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/10.jpg)
Part 2 Overview of experiments
![Page 11: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/11.jpg)
Overview of experiments • Iden-fying drivers of compliance • Effec-veness of RRA communica-ons and delivery mode
• Pilot of possible future interven-on • Possibility of scaling up if successful • Varia-ons in:
– Informa-on available to taxpayers – Taxpayer’s percep-ons – Not actual tax parameters (e.g. audit rates)
11
![Page 12: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/12.jpg)
Experiment 1 • Pilot for bigger experiment 2 • Treatment lecer (1,000):
– Informa-on about sanc-ons: higher if caught by audit, lower is self disclose
– In 3 languages • Outcome: revisions (amount and probability) • Data being analysed – no results yet • Lessons learned
– Taxpayers reac-ons: stories – Process of lecer prepara-on and dissemina-on – Personalisa-on
12
![Page 13: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/13.jpg)
Experiment 1 leNer
13
![Page 14: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/14.jpg)
Experiment 2 • Treatment lecers:
– Deterrence message – Public service and self-‐reliance – Control: reminder of deadlines
• Delivery methods: – Lecers for CIT – Emails for CIT – SMS for CIT and PIT
• Timeline: tax filing period • Outcome: reported income in 2014 return • Data to be analysed star-ng in April 2016
14
![Page 15: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/15.jpg)
Deterrence Do you know that if you do not declare and pay your taxes on 6me, RRA can fine and possibly prosecute you?
Pay your taxes on 6me and avoid fines and penal6es.
15
![Page 16: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/16.jpg)
Public services message By paying your taxes you make it possible to educate our children, fund our healthcare, and keep us safe. Pay taxes. Build Rwanda. Be proud.
16
![Page 17: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/17.jpg)
Now fully implemented!!!
17
![Page 18: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/18.jpg)
Final reflec5ons • Teamwork
• Mutual learning – Research methods – Context and prac-ce of tax in Rwanda
• Confiden-ality
18
![Page 19: Analysing tax compliance with administrative data in Rwanda](https://reader031.vdocuments.net/reader031/viewer/2022021919/5877d8891a28abaa6c8b5ae9/html5/thumbnails/19.jpg)
Thank you!