Early last December, Rwanda Revenue Authority (RRA) recognized best taxpayers of the 2024/2025 fiscal year in a colourful 23rd edition of the Taxpayer Appreciation Day (TAD), under the theme “Sora, Nsore, Twigire.” (My Tax, Your Tax, Our Self-Reliance).

The annual event provides a platform to honor outstanding taxpayers, recognizing their significant contributions to national development across various business sectors.

In modern tax administration, the alignment of effective policies and enforcement with taxpayer incentives represents a pivotal strategy for fostering voluntary compliance and strengthening revenue mobilization.

From the Rwanda Revenue Authority (RRA) perspective, rewarding compliant taxpayers emerges as a fair practice and aneconomically sound policy that reinforces trust in the tax system, enhances fiscal discipline, and stimulates broader economic participation.

This blends with the global perspective on voluntary tax compliance for taxpayers to willingly comply with tax laws without direct enforcement, and to foster such patriotic behavior.

The awardee selection criteria are aligned with international best practices and adapted to Rwanda's context, with a focus on EBM usage and other administrative initiatives, including the recognition of tax arrears and the voluntary, amicable settlement of such obligations through contractual arrangements.

This tradition reinforces desirable taxpayer behavior — those who timely and accurately fulfill their tax obligations. In Rwanda, where tax policies are closely tied to economic development goals, this approach serves several complementary objectives:

1. Encouraging Voluntary Compliance

Reward mechanisms — whether through public recognition or reduced compliance burdens — positively influences taxpayer behavior. When compliant taxpayers feel valued and see tangible benefits, this fosters a sense of fairness and strengthens their commitment to legal obligations. The RRA’s use of awards and acknowledgments cultivates a culture where compliance is both expected and appreciated.

Measures to facilitate the payment of arrears, for example, contributed Frw240.2 billion to the Frw 3,099.0 total revenue collection in the 2024/2025 fiscal year, exceeding the target of Frw3,041.2, indicating a GDP growth rate of 6.3%. This was an impressive 17.4% increase compared to the revenue collection in the FY2023/2024.

2. Enhancing Revenue Mobilization

While enforcement remains critical, incentives can improve compliance rates more sustainably in the long term. Rewarding conformity lowers the administrative costs associated with enforcement actions and disputes. When more taxpayers voluntarily comply, the RRA can redirect resources toward strategic enforcement and taxpayer service enhancements, ultimately broadening the tax base and stabilizing revenue flows — crucial for financing public services and national priorities.

3. Building Trust, Transparency and accountability

Trust between taxpayers and the revenue administration is foundational. Reward programs signal that the RRA recognizes the contributions of taxpayers and acknowledges that compliant behavior deserves acknowledgment. This two-way relationship fosters transparency, reduces perceptions of arbitrary enforcement, and mitigates tax resistance — a key factor in economies where skepticism about public institutions can dampen tax morale.

4. Stimulating Economic Growth

A predictable and equitable tax environment bolsters investor confidence and supports business planning. When businesses and individuals are assured that compliance is both recognized and beneficial, they are more likely to invest, expand operations, and engage formally with the economy. Formalization, in turn, enhances regulatory oversight, increases job creation, and supports Rwanda’s vision for inclusive and sustainable economic growth.

5. Addressing Equity and Fairness

Equitable tax systems ensure that compliant taxpayers do not unfairly subsidize those who evade their obligations. Rewards for compliance serve as a corrective signal, affirming that fairness remains central to Rwanda's tax policy. This helps to mitigate social tensions that arise when non-compliance goes unchecked or unaddressed.

From the Rwanda Revenue Authority's perspective, rewarding compliant taxpayers is not merely a goodwill gesture; it is a strategic economic policy that reinforces voluntary compliance, strengthens revenue mobilization, enhances equity, and supports broader development goals.

This falls within the visionary guidance of His Excellence Paul Kagame, President of the Republic of Rwanda, to recognize and honor the contributions of taxpayers to the community and the nation, and to promote the culture of civic responsibility.

In an era where trust and cooperation between citizens and institutions are paramount, such incentive-based approaches position Rwanda’s tax system as both progressive and responsive — driving economic stability and shared prosperity.It’s a prudent act that reinforces Rwanda’s development strategy agenda — self-reliance — a core national value and a foundational principle of Rwanda’s Vision 2050, which aims to transform the country into a high-income, knowledge-based economy by 2050.